Inflation has plummeted but these prices are still soaring

(NEW YORK) — A better-than-expected inflation report last week bolstered hopes that a prolonged bout of severe price hikes is near its end — but the costs of some staple items continue to soar.

Consumer prices rose 3% last month compared to a year ago, marking a significant slowdown from a peak last summer of more than 9%, government data showed.

The aftereffects of pandemic-induced supply chain blockages and the Russia-Ukraine war, however, have kept price hikes elevated for some crucial goods, such as bread and frozen vegetables, experts told ABC News.

Here’s what to know about which prices are still rising and what’s causing the surge.

Bread and beer

The price of bread jumped 11.5% in June compared to a year prior, marking a cost increase nearly four times higher than overall inflation. The cost of cookies jumped 8.8% over that period, while the price of beer leapt 5.4%, according to government data.

Taken together, these sharp price hikes stem in large part from grain supply shortages imposed by the Russia invasion of Ukraine, the world’s fifth-largest exporter of wheat, said Mark Hamrick, a Washington bureau chief and senior economic analyst at Bankrate.com.

“It begins with the war in Ukraine,” Hamrick told ABC News. “And there have been ripple effects from that.”

On Monday, Russia paused its participation in a key deal allowing for the export of Ukrainian grain, potentially exacerbating the global supply shortage, said David Ortega, a food economist at Michigan State University.

And even as global supply chains have tried to adapt to the grain shortage, elevated fuel prices have added transport costs, Ortega said.

“There’s a reality of higher energy costs compared to pre-COVID,” he said.

Processed fruits and vegetables

Some of the most eye-popping price increases have struck packaged fruits and vegetables.

Frozen vegetable prices soared more than 17% in June compared to a year prior, which makes for an inflation rate nearly six times higher than the overall pace. The cost of canned fruits jumped more than 8% over that period, meanwhile, and the price of canned vegetables rose more than 5%, government data showed.

Such foods have resisted a cooldown in prices because they require a “long supply chain” that calls for packaging and processing, which in turn exposes them to elevated supply costs as the global economy works out remaining kinks from the pandemic disruption, Ortega said.

By comparison, Ortega noted, price increases for fresh produce have slowed significantly. The prices of fresh fruits and vegetables climbed just 1.1% in June compared to a year prior.

“In the perimeter of stores, we’re seeing food prices abating,” Ortega said, highlighting the presence of fresh food in that area. “In the center of the store, that’s where we’re seeing food-price inflation persist.”

Underwear and jewelry

Price hikes also remain sky high for some apparel goods. The prices for women’s underwear and swimwear jumped more than 7% in June compared to a year ago; the price of men’s underwear climbed over 4% during that period.

“I did purchase underwear myself recently and literally made a comment to the store clerk saying it’s getting expensive to wear underwear these days but there’s no alternative,” said Hamrick, of Bankrate.com.

In general, such price spikes result from a “mismatch between supply and demand,” Hamrick added, noting that he did not know the exact cause of the rise in underwear prices.

Similarly, the price of jewelry jumped more than 7% in June compared to a year ago, far outpacing the inflation rate for overall apparel costs during that period, which stands at 3.1%.

Other notably high price increases over the past year include a roughly 12% leap in pet food costs and a nearly 9% rise for tools and outdoor equipment, government data showed.

The price of eggs, which spiked last summer due to an avian flu outbreak, has fallen nearly 8% over the past year.

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