Food prices climbed 1.5 percent in April

If you think food has taken a bigger bite out of your budget recently, you are not hallucinating. The federal government's inflation experts have confirmed your suspicions.

Food prices at the grocery store rose 1.5 percent in April, thanks to big increases in all major food categories analyzed by the Bureau of Labor Statistics, which reported its monthly inflation figures yesterday.

The Philadelphia area was in the same boat, seeing grocery prices rise 1.2 percent from February to April. Unlike the national data, the Bureau of Labor Statistics studies regional inflation figures every two months.

The bad news is being felt in food categories most consumers know and love: bread, milk, butter - even coffee. They are staples people buy every week. The kinds consumers cannot help but notice are costing more.

Agricultural economist Annette Clauson said the uptick in prices in core food categories was feeding shoppers' anxieties as they also shell out bigger bucks for other routine outlays that, not so long ago, seemed more affordable.

"You're seeing the higher gas prices along with higher utility prices in most cases, along with higher food prices," said Clauson, who studies food costs for the U.S. Department of Agriculture. "So they're kind of getting hit all at the same time."

Despite the sharp increases in food costs, U.S. consumers are still spending less of their income these days on food than they were decades ago, Clauson said. In 1929, Americans spent 23.4 percent of their disposable income on food. By 2006, the latest year available, that was down to 9.9 percent.

But because some of the most jarring recent increases have come in staple food categories, consumers are feeling the pinch acutely. "They see those price differences . . . the ones that they're somewhat alarmed about," she said.

One big increase last month was for coffee, which went up 4 percent. There were other big spikes in butter prices, which went up 7.8 percent, and margarine, up 6.5 percent from March, the Bureau of Labor Statistics reported.

While bread and milk prices rose less sharply during the month (bread went up 1.5 percent, milk 0.9 percent), the bureau said they were much higher than just a year ago, in April 2007.

Bread prices last month were 14.1 percent higher than 12 months earlier, and milk was 13.5 percent more expensive.

And worse news: The government does not expect prices to drop much in the coming months. Clauson said the USDA predicts food prices will have increased as much as 5 percent this year. This after food prices last year increased 4 percent, she said.

"We're looking for cereal and bakery products to go up 7.5 to 8.5 percent," Clauson said, and fats and oils to rise up to 9 percent because of high commodity prices.

Beyond food prices, the BLS said consumer prices overall in the Philadelphia area rose 1.2 percent in the March-to-April period, the biggest two-month rise since the summer of 2006.

The biggest culprits were costs for housing, transportation and apparel, but Sheila Watkins, the bureau's regional commissioner in Philadelphia, said all eight major categories in the local consumer price index rose.

For the March-to-April period, local housing costs were up 0.9 percent, led by a 2.0 percent increase in home-fuel and utility costs.

Transportation prices increased 2.3 percent in the two-month period, mostly because gasoline prices rose 8.9 percent, the bureau said.

Apparel was up 6.8 percent, paced by higher prices for girls' clothing.

Changes in the Philadelphia area for major categories in the Consumer Price Index.* Story, C4.

Category             % change

Apparel +6.8

Transportation +2.3

Housing +0.9

Food/beverages +0.6

Recreation +0.2

Education/

communication +0.1

Medical care +0.1

*Price changes are for the combined March-to-April period.

SOURCE: Bureau of Labor Statistics

EndText

Prices Americans paid for food prepared at home rose 1.5 percent in April compared with a 0.2 percent gain in March. A breakdown of percentage changes from March for key grocery items.

Margarine +6.5

Processed fruits

and vegetables +3.4

Pork +3.4

Fresh fruits +3.2

Fish and seafood +2.6

Carbonated drinks +2.2

Bread +1.5

Cereals and

bakery products +1.4

Milk +0.9

Poultry +0.7

Beef -1.1

SOURCE: Bureau of Labor Statistics

EndText