Food prices (PCE) rose 0.1% from June and 3.0% from a year earlier, driven mostly by supply-side forces, which account for around 90% of the total shock in our model

• Food-at-home prices fell 0.1% from June (m/m) and 2.7% year-over-year (y/y)

  • Grocery prices slipped slightly in July, the first monthly dip in our tracking. Meats softened broadly (beef, pork, and other meats all fell) and fresh vegetables dropped sharply, more than offsetting gains in fresh frit, soft drinks, dairy, and sugar. Eggs also eased a touch after three months of rebound.

  • Over the year, grocery prices kept colling over 12 months. Beef remained the top gainer but slipped below 10% for the first time in our tracking, and eggs' annual decline narrowed further (abouth -26%, up from roughly -28% a month earlier). Sugar and sweets, fish and seafood, fresh vegetables, and coffee clustered near 7%.

• Food service prices rose 0.3% from June and 3.4% y/y 

  • Restaurant and other food-service prices rose about 0.3%, steady and uniform across categories, much as in recent months.

  • Food service prices rose around 3.4% over the year. They are still running hotter than groceries annually and steadier month to month, with  a broadly similar pace across limited- and full-service meals, school meals, and restaurant alcohol.