Start of June Slow
Initial same store sales reports for the first week of June show that independent grocery sales were down 2.8 percent compared to the same period in 2017. Customer counts were down 1.7 percent.
This week the Bureau of Labor Statistics released its consumer price index report, which showed that food at home prices fell 0.2 percent during the month of May, combining results of the following subcategories: ceral/bakery (unchanged), meat/poultry/fish/eggs (-0.7 percent), dairy (-0.1 percent), fruits/vegetables (-0.3 percent), nonalcoholic beverages (-0.4 percent), and other (-0.2 percent).
Over the last 12 months, food at home prices have increased just 0.14 percent. The index for all items increased 0.2 percent in May and has increased 2.8 percent over the past 12 months. The bulk of that increase has come from a big jump in energy prices. If we wind back the clocks 12 months, we'll remember that gas prices were at very low levels. That market correction has brought the overall CPI rate up to nearly three percent.
The Fed is obviously not concerned with the inflation rate, as it announced it will make its fourth short-term interest rate hike later this year. After being at near-zero for years following the 2009 recession, the Fed has been slowly raising rates, confident in the state of the economy.