Economy

US Food Prices Jump Highest Monthly Increase In 46 Years

Food prices in the U.S. are higher than they have been in almost a half-century, thanks to disruptions in the supply chain, economic issues and spikes in viral infections.

According to the Associated Press, prices spiked in April by 2.6 percent — a higher number than has been seen at any point in 46 years — and are likely to stay that way for the time being, according to the Labor Department. That included a 4.3 percent leap in prices for common items like eggs, meat, fish and poultry, which has leveled off a little in May as customer demand eased up.

There was also a 2.9 percent jump for cereals and bakery products, which was the largest such increase the Labor Department has recorded.

For items like carrots, potatoes and other produce, prices will be high for the foreseeable future due to disrupted transportation and health issues for the workers who pick them outside.

Slaughterhouses are having a hard time keeping up with normal production levels, and due to the social distancing precautions necessary to keep workers healthy, meat prices will likely remain high. Slaughterhouse workers have been hit hard by the coronavirus, reporting lethal outbreaks for pork processing plant workers in particular, with beef and chicken processing plants also seeing heavy infection rates.

According to the United Food and Commercial Workers Union, 44 workers had died from the coronavirus as of Friday (May 29).

All of this could mean dire straits for restaurant owners who rely on buying food to serve to customers, and who are themselves facing precarious conditions as the economy remains slow and workers are still either unemployed or fearful of going out too much.

The prices were high at first because people were panic-buying, stocking up in preparation for staying at home more often. Another factor is that many people have gotten into the habit of cooking at home.

Even as states reopen, the economy is moving sluggishly due to the lack of jobs and the lingering fear of catching the virus.

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NEW PYMNTS DATA: HOW WE SHOP – SEPTEMBER 2020 

The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.

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