00:00 Speaker A
March inflation numbers are out and overall, the report shows inflation pressures easing considerably last month with annual core prices rising at their slowest pace since March of 2021. But there are still some sticky areas here. Here with more, we’ve got Yahoo Finance senior reporter, Brooke DiPalma. Brooke, your bread and butter, pun intended, is food retail. So give us the breakdown of what Americans are paying for their food.
00:33 Brooke DiPalma
Well, overall food prices are still seeing that sticky inflation and they’re largely still experiencing a bit of the sticker shock at food stores. If you take a closer look at each industry, look at food, look at food away from home, look at food at home. We’re seeing upticks across the board when it comes to year over year. We’re seeing a bit of a flat line of food at home, uh, month over month, but largely we’re seeing this influx. And that’s largely when you look at groceries alone. It’s driven by sticky inflation points from things like eggs, ground beef, and instant coffee. Those were some of the higher increases year over year that we saw within this report. So let’s first start with breakfast here. If you take a closer look at egg prices, they’re still up 60% year over year. It’s certainly hard to swallow, especially for Americans who have been discussing eggs so much. They are up roughly, uh, 1.2, or rather 5.9% in the last month. If you take a closer look at that, just double checking here, 1.2% month over month. And then also when you think about what exactly we’re seeing here is wholesale prices have been getting lower, but that hasn’t really translated to stores just yet, an expert telling me this morning that higher egg prices are not really a surprise because wholesale prices were coming down in February. That then didn’t roll into retail prices in March. And then ultimately Easter here, that’s a bit of a mixed bag here, what exactly happens? Does that increase demand? Will that prove then more volatility? And also coffee prices, another breakfast staple there, that increased largely because we’re seeing this shortage in supply, especially when it comes to one of the top markets of Brazil. They have an uncertain outlook when it comes to the supply there. Also keep in mind what happens with these tariffs. We import most of our coffee beans from say countries like Brazil and Colombia. Also we’re seeing milk. That’s another sticky area of inflation for breakfast. Bread and cereal did see a bit of relief here, so that’s good news there. Um, but fresh fruits fruits and vegetables also, uh, saw a decline, and largely we know that those hurricane disruptions back in the fall, that really drove some disruption when it comes to fresh fruit and uh, fruits and vegetables. Dinner though, if you’re looking at those canned veggies and fruits, maybe, uh, don’t go there because that’s steel aluminum. We’re seeing higher prices there. Meat still giving people problems. That uncooked ground beef, one of the highest increases year over year that we saw. American cattle supply is still low. Also we’re seeing some seasonality at work here. We’re seeing, uh, shortage in demand among beef because, uh, people are back grilling. They want to cook this beef and increase in demand then leads to less supply and therefore higher prices.
05:40 Speaker A
But back to the egg story, Brooke. I mean, egg prices have been the talk of the town for the last couple of months. Supply issues from avian flu, now tariffs, talk of Wall Street, I mean, it pops up in our feed all the time. All we asked for was the price of eggs to come down. So what kind of price hikes could we see as a result of these tariffs and and actually, let’s play this quick clip because this morning we spoke to New Century Advisors Claudia Sahm. She had this to say in comparison to egg prices.
06:27 Claudia Sahm
Some will say, oh, we’re not going to end up collecting those tariffs. That’s just ridiculous. No one’s going to pay that for Chinese imported goods. It’s like, well, that is that is a distinct possibility, but that means if in the short run we have a big pullback in the supply of goods, well, it could show up in higher consumer prices. T-shirts could be the new eggs here shortly.
07:20 Speaker A
So she’s saying apparel prices could rise as a result of tariffs here. So what are we currently hearing from retailers, which is another area that you cover closely and watch closely, as a result of potential impacts of of potential tariffs here?
07:44 Brooke DiPalma
Right. Well, keep in mind, China now has that more than 100% tariff on the countries.
07:53 Speaker A
125%.
07:55 Brooke DiPalma
125%. That’s a big pill for a lot of these apparel companies to swallow. Now a lot of them have said that they moved out production over there, but Skechers, Nike, even Walmart continues to produce in China, import from China. And so certainly we heard from Walmart on Wednesday at their investor day that they still plan to keep prices low. That’s still a goal of theirs, but it will certainly be difficult in this environment when there is a 125% increase in mind. And and also keep in mind that ahead of these tariffs going into effect, there was an influx of apparel coming into the US. And that’s what I’m hearing from PWC is that largely apparel companies have to offset that increase in price of, uh, bringing in these apparel ahead of the tariffs and then storing it. That extra cost of storing it in the interim also will drive prices higher. And so they said that we could see those higher prices coming to effect in early spring, early summer, despite this tariff that then went into effect just last week. And so that’s definitely something to watch out for. Bottom line here, clothes are going to get more expensive because of where we ship them from.
09:11 Speaker A
Yeah, I want some of those tariff-free clothes. How about that? The same way that they’re marking off cars tariff-free. I want those those items in the, uh, clothing aisle perhaps to be marked off. Uh Brooke, thanks so much. We got a lot of track here.
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