The Price of This Food Jumped 20% Last Month

By Douglas A. McIntyre Published Aug 13, 8:30AM EDT

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The Price of This Food Jumped 20% Last Month — © ToscaWhi / iStock via Getty Images

Is inflation high compared to other times that prices have risen in the past? It rose 15% to 18% during some years of President Jimmy Carter’s term in office. Now, however, there have been efforts to keep prices down, particularly by the Federal Reserve. The run-up in demand for certain goods and services since the worst of the COVID-19 pandemic and an improved economy have triggered a large increase in the prices of some products, like cars.

Inflation is indeed highly dependent on product and service demand right now. The Bureau of Labor Statistics Producer Price Index shows that, overall, prices did rise sharply in July. The agency indicated that demand rose 1% from June to July. Automobiles contributed much of this as they were up 11.1%. Energy rose 26%, and the increase in food prices was uneven.

The demand for eggs for fresh use soared 19.5% from June to July. Beef and veal went in the other direction, down 16.8%. However, food prices in general are nearly out of control. Phil Lempert, an analyst and food trends expert known as the Supermarket Guru, shared with Fortune his opinion about groceries: “We’re going to continue to see price increases, probably for the next two years or so.” The Washington Post pointed out: “Groceries have been trending higher for well over a year, with the Bureau of Labor Statistics showing a 2.6 percent rise in the ‘food at home’ category compared with last year.”

What does this increase in grocery prices mean? By itself, it might not affect the spending power of Americans. When linked to prices of cars, gasoline and other commodities though, it starts to erode the discretionary income of many households. That could be very bad news as the year progresses toward the heavily consumer-driven holiday period.
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The other factor in calculating consumer buying power is wages. In general, these have risen this year. That means over the next few months, the battle between earnings and what people have to pay for basic goods and services will tell how the consumer economy tracks for the next several months.

Click here to see which 20 groceries are driving up your food bill.
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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.