July’s consumer-price index (CPI) showed inflation rising, overall, at a relatively steady pace.
But in the devil’s in the details, as they say, and the cost of keeping food on the table has been rising, after a bit of a lull.
Overall, the data released Thursday (Aug. 10) by the Bureau of Labor Statistics estimated that prices were up 0.2% month over month, and that’s the same pace that had been seen in June (as measured over May’s levels). And while the fact remains that the top line number has met consensus expectations, and that the Fed may not in fact continue to boost interest rates as inflation tapers to an annual 3.2% pace, the fact also remains that the staples of daily life are now a bit more expensive than they had been.
Right into the teeth of the resumption of student loan payments as early as this fall.
The data show that month over month, the price increased 0.3% in July for food consumed at home — read: groceries — where that pace had been flat, 0.1% higher and actually 0.2% lower in each of the previous months dating back to April. Food consumed away from home, at restaurants, saw a 0.2% gain, down from June’s 0.4% rise and May’s 0.5% boost.
The BLS reported that four of the six major grocery store food group indexes increased over the month. The index for meats, poultry, fish and eggs rose 0.5% in July and the fruits and vegetables index increased 0.4% in the same month.
These pressures were offset — at least just a bit — because apparel prices were flat, and inflation tied to shelter (such as rental payments) was 0.4%, down from a recent monthly high of 0.8% at the beginning of the year.
As for the impact of the student loans: PYMNTS data show that the share of disposable income that may be wiped out by a resumption of those monthly obligations can range from the mid single digit percentage points to as much as the low double digit percentage points, depending on which generation/demographic you’re looking at.
Millennials would lose as much as 6.5% of annual disposable income; boomers and seniors would lose more than 11%. Other PYMNTS data reveal that as many as 80% of grocery shoppers, during the past several months and through 2022, took at least one action in terms of reducing quality or quantity of that they’d bought — even going so far as to change merchants.
There’s also some evidence that consumers are embracing a variety of payment methods to pay for what’s in their grocery carts and to make those payments a bit more budget friendly. In every generation, more than 1 in 10 buy now, pay later (BNPL) users’ most recent transaction with the payment method was a grocery purchase, as detailed in our report “The Credit Economy: How Younger Consumers Make Credit Decisions.”