U.S. retail grocery prices increased 0.8 percent in May and are running nearly 5 percent above a year ago, according to the USDA.
The USDA’s June Food Price report said retail grocery prices were increasing faster than prices for food sold at restaurants.
Prices for food sold at restaurants increased by 0.4 percent from April to May, and stood 2.9 percent higher than May 2019. For food sold at grocery stores, prices jumped 0.8 percent from April to May. Compared with a year ago, retail grocery prices in May were 4.8 percent higher than a year ago.
For all of 2020, the USDA now predicts retail grocery prices will increase 2.5 percent to 3.5 percent. Restaurant food prices are projected to increase in a range from 1.5 percent and 2.5 percent in 2020, according to the agency.
Inflation for fruits and vegetables increased 0.7 percent from April 2020 to May 2020 and is up 1.5 percent compared with a year ago. The USDA said labor costs have risen because of COVID-19.
“With some exceptions, most fresh-market vegetable growers rely on human labor to produce and place a crop into supply channels,” the USDA report said. “It is anticipated that skilled labor will be scarcer and procedural changes to comply with recommended social distancing may reduce productivity.”
Inflation for fresh vegetables rose 0.9 percent from April to May, while fresh fruit increased 0.2 percent.
For the year, retail inflation for fruits and vegetables is projected to increase as much as 1 percent, according to the report.