Topline
As the U.S. sees an eighth straight month of falling inflation, a steep drop in wholesale egg prices last month fueled an unexpected decline in the producer price index, a predictive indicator for consumer prices, data from the Bureau of Labor Statistics released Wednesday showed.
Eggs are displayed on store shelves at a local grocery store in Chandler, Ariz., Jan. 21, 2023.
Key Facts
A 36.1% drop in chicken egg prices accounted for more than 80% of February’s month over month decline in the producer price index, a measure tracking the prices manufacturers pay for goods, the Labor Department said.
The decrease aligns with a survey from Empire Manufacturing showing prices paid month to month dropped 3.1 points between March and February.
The Labor Department on Wednesday reported food prices in February fell 2.2% from January—signaling high prices at the grocery store could be due for a reversal.
While chicken eggs were the largest contributor to the decline, prices of fresh and dry vegetables, as well as natural gas and diesel fuel also fell, the Labor Department said.
Key Background
For the first time since September, egg prices dropped on a month-to-month basis, falling 6.7% between January and February, the Labor Department reported Tuesday. In February, the average price for a dozen grade A eggs was $4.21, down from January’s record breaking price of $4.82, according to the Labor Department. Egg prices skyrocketed after a major avian flu outbreak killed more than 50 million in the U.S. last year. In the new year, those rates have lessened, with the Department of Agriculture reporting more than 225,000 affected birds in the past 30 days.
Further Reading
Inflation Fell To 6% In February—But Some Experts Fear Banking Crisis Could Make Prices Worse (Forbes)
Egg Prices Finally Drop 6.7% In Biggest Decline Since 2020—But Remain Historically Expensive (Forbes)
Source: https://www.forbes.com/sites/anafaguy/2023/03/15/wholesale-egg-prices-tank-36-fueling-unexpected-drop-in-food-inflation/