Red-Hot Inflation Drives Up Prices of Everyday Essentials

U.S. consumer price inflation surged 9.1 percent over the past 12 months to June, the fastest increase since November 1981, according to government data released on July 13, 2022. (Angela Weiss/AFP via Getty Images)

Soaring inflation is pushing up prices of food, energy, and other essential commodities, putting more financial strain on American citizens, with many households spending considerably more of their income on groceries compared to a year ago.

The 12-month Consumer Price Index (CPI), a measure of inflation, hit a record 9.1 percent in June, according to data published on July 13 by the U.S. Bureau of Labor Statistics (BLS). Food prices rose by 10.4 percent in June, with the “food at home” index jumping by 12.2 percent, the largest 12-month increase since April 1979.

All six major grocery store food group indexes rose during the 12-month period ending June, with five groups rising by over 10 percent. The index for fruits and vegetables rose by 8.1 percent, cereals and bakery products by 13.8 percent, and butter and margarine by 26.3 percent.

The “food away from home” index rose by 7.7 percent, the largest annual increase since November 1981. The full service meals index jumped by 8.9 percent and the limited service meals index by 7.4 percent.

On a monthly basis, food prices in June are up 1 percent from May. “Food at home” rose by 1 percent, the sixth straight month when the index has risen by at least a percent. Monthly “food away from home” increased by 0.9 percent in June.

The average U.S. city price for a pound of fresh whole chicken jumped from $1.474 in June 2021 to $1.823 in June 2022, according to data from the St. Louis Federal Reserve. During this time, the average price of ground 100 percent beef rose from $4.357 per pound to $4.889 per pound. The cost of a dozen eggs jumped from $1.642 to $2.707.

According to a June sales report from NielsenIQ, American consumers are increasingly spending more of their income on basic groceries. Ryan Sweet, senior director of economic research at Moody’s Analytics, estimates every American to be spending an extra $460 per month due to inflation.

“The effects of high and sustained inflation are much more pernicious than unemployment in the sense that high prices affect more people,” Mark Hamrick, Bankrate’s senior economic analyst, said in a statement. “The cost of basics is increasingly out of reach for many.”

Other Commodities and Services

Twelve-month energy prices rose by 41.6 percent in June, with gasoline rising by 59.9 percent and fuel oil by 98.5 percent. Electricity prices are up by 13.7 percent and piped gas services by 38.4 percent.

Excluding food and energy, annual inflation is up by 7.2 percent. The prices of new vehicles rose by 11.4 percent, used cars and trucks by 7.1 percent, apparel by 5.2 percent, medical care commodities by 3.2 percent, shelter by 5.6 percent, transportation services by 8.8 percent, and medical care services by 4.8 percent.

The official inflation rate “doesn’t even fully capture” how bad the situation is, Joel Griffith, research fellow in economic policy studies at The Heritage Foundation, said in a statement, calling the 9.1 percent June inflation “devastating.”

The Biden administration is “tone-deaf” to the economic realities as well as the problems it has created, he stated.

“Biden’s war on affordable energy production is the main culprit for both the high gas prices and skyrocketing food prices … Things are only going to get worse, one way or another, as Biden’s economic policies are a double-edged sword,” Griffith said, predicting the CPI to potentially hit 10 percent by the fall.