Food price inflation
Average food at home prices increased by 1.1% in the 12 months through June and 0.1% from the previous month, according to the latest inflation data released by the Bureau of Labor Statistics.
Four of the six major grocery store food group indexes increased over the month. The cost of butter and margarine rose 2.4%, dairy and related products rose 0.6%, and meats, poultry, fish, and eggs increased by 0.2%.
Schonberger prompted Yellen: “I know they [food prices] are not rising at the rate that they were last year, but they’re still up 20% from pre-COVID.”
According to FRED Economic Data, the average food at home prices in the U.S. have soared by 25.4% since January 2020 (before the pandemic-related disruption).
The data speaks volumes, and Yellen said it largely reflects cost increases, including labor cost increases, that grocery firms have experienced. "Although there may be some increases in margins," she added.
She assured her interviewer that grocery store execs are aware of the financial pain that Americans are experiencing. She told Schonberger she’d met with a group of grocery store CEOs — including the head honcho of Target, Brian Cornell — before the interview.
“They explained and they've announced that they understand that households are struggling with costs, including food costs, and they’ve undertaken cuts in the price of bread, milk, diapers [and] other core purchases that are necessities for households,” she said. “I think that’s to be applauded. I think that kind of thing is helpful.”
The Treasury Secretary does not see a need for additional government intervention to help ease food pricing at this time. When quizzed about whether Washington should invest more in agriculture to boost the nation’s food supply, she said she would be “reluctant to agree that we should be involved in subsidizing agriculture.”
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Read MoreHow to cope with rising costs
While the food inflation index continues to sting, you can manage your costs by substituting brand-name foods and items with generic alternatives. Cooking food from scratch rather than buying ready-made meals can also save you a few bucks.
When shopping for essentials, consider using a cash-back credit card to earn rewards on your purchases, or make use of food coupons (from newspapers, flyers, online apps and so on) to enjoy savings when you checkout at the grocery store.
You can also ease your financial pain by sticking to a strict budget that breaks down your monthly income into necessities, wants, savings and (if you’ve borrowed money via credit cards, student loans, car loans and so on) debt repayments.
One common school of thought — the 50/30/20 budget — suggests that you should spend around 50% of your monthly income on necessities, 30% toward wants, and 20% toward savings.
When inflation is high, you may need to tweak those allocations to get by — and that’s okay. You can revisit your budget when your finances are in better shape and perhaps start saving more money to ensure your long-term financial security.
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