Consumer prices tick up again in May as some summer staples soar

After climbing 0.6% in April, consumer prices rose 0.5% month over month in May, the Bureau of Labor Statistics reported this week. Prices also jumped 4.2% YoY, the sharpest annual increase in three years.

The price increase was largely driven by continually escalating energy prices, which rose 3.9% month over month and 23.5% YoY. Core CPI, which excludes food and energy prices, was up 0.2% month over month.

Zoom in: Food inflation cooled but continued to tick up in May, rising 0.2% month over month after a 0.5% jump in April. Three of the six major grocery categories saw increases. Nonalcoholic beverages increased 0.6%, driven up by rising coffee and tea prices. Cereals and bakery products were up 0.4% and fruits and vegetables rose 0.2%.

As the grilling season approaches, prices for core summer staples remain elevated. Lettuce prices jumped 16.4% from April, and are nearly 25% higher than they were last year. Tomato prices fell 6.1% in May, but are still up a whopping 32% from last year. And while ground beef prices and frankfurter prices cooled in May, they’re still up 12.1% and 7.7% YoY, respectively. Alcoholic beverage prices notched up 0.1% in May and 2.1% YoY.

Across other categories: Apparel prices rose 4.8% YoY and 0.3% month over month. Personal care products climbed 2.6% YoY, but fell 0.1% from April.

Zoom out: Consumer sentiment hit an all-time low in May, dropping for the third straight month, the University of Michigan reported. The report also noted 57% of consumers “spontaneously” noted elevated prices were impacting their finances. Many consumers were concerned prices will continue to tick up, with year-ahead inflation expectations climbing from 4.7% to 4.8%.

As consumers become more price-sensitive, many brands and retailers are cutting prices, Retail Brew reported earlier in June, with food CPGs like PepsiCo, retailers like Kroger and Walmart, and beauty brands like E.l.f. Cosmetics among those re-evaluating their price tags.