Inflation concerns are heating up as fresh data from the Labor Department shows U.S. consumer prices have risen more than 4% over the past year, marking the sharpest increase since 2008.
Costs of goods are rising as commodity prices are also racing higher.
“We are starting to see those higher farm commodity prices show up in higher retail food prices,” says Jayson Lusk, an agricultural economist with Purdue University. “If you just look at the year-over-year change, it doesn’t look crazy, it doesn’t look outside the norms. But I think the cumulative effect is really starting to appear in the data. And really, over the course of the last year, we’re seeing retail food prices starting to tick up quite a bit.”
While corn prices were limit down at one point on Thursday, the price drop comes after corn prices gained $1 in just two weeks. The rise in commodities may not be over yet, adding fuel to the inflation debate.
“At the moment, it looks like those high commodity prices may be with us,” says Lusk. “I think we’ll probably continue to see that in our food prices and our meat prices.”
In May, wholesale choice beef prices reached prices not seen since the early weeks of the pandemic. With added expenses and labor challenges for those trying to serve customers, it’s making for an expensive and challenging return to normal.
Food isn’t the only item costing consumers more. Labor Department data shows used car and truck prices increased more than 10%, which marks a new record.
Inflation concerns drove stocks on Wall Street to drop for a third consecutive day, as investors are concerned the Federal Reserve will keep rates low to help bolster the U.S. economy.
