After two months of sharp increases in food prices, grocers are starting to pass along their higher wholesale costs to consumers.
Beverly Cabellon, 61, of Pleasant Hill, Calif., was taken aback by the $38 price for two steaks at Costco recently, up from the $27 she paid last September. "I will be grilling more vegetables and shrimp this summer," she says, adding that she and her husband will likely eat beef once a month instead of weekly. "And I may switch to pork and chicken."
Food prices increased 0.4% after posting a similar jump in February, the Bureau of Labor Statistics said Tuesday. That's the largest monthly increase since September 2011. Beef, pork, poultry, eggs and milk have had the most dramatic price hikes as drought, a virus outbreak and rising exports have thinned U.S. supplies.
Overall consumer prices rose 0.2% in March, a bit more rapidly than in recent months, and annual inflation was 1.5%, up from 1.1% in February. Still, that's well below the Federal Reserve's 2% target as falling gasoline prices offset rising food costs.
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But the higher food bills are squeezing households still struggling with meager wage gains and could crimp spending just as the recovery is expected to accelerate.