Prices for several consumer goods are finally coming down after months of record highs. That’s great news for cost-conscious consumers, who’ve been paying top dollar for everything from eggs to used cars. For March the Consumer Price Index was up 5 percent, marking the smallest 12-month increase since May 2021. Further declines are expected in the months to come as supply chain issues work themselves out and supply-and-demand imbalances improve. That is particularly true of certain food categories that have seen high prices for months.
“Where we are seeing prices fall is primarily in the perimeters of the grocery store,” says Tom Bailey, a senior consumer food analyst at Rabobank. “Produce, dairy, meats and things that are a lot more volatile are coming down. Prices tend to rise and fall more directly with what’s happening in the supply chain. They led prices up and are leading prices down.”
There are several reasons why food prices are improving. Demand is easing as excess pandemic disposable incomes wane, supply chain problems have largely been worked out, and virus outbreaks that hurt egg and poultry supplies are less of an issue now.
Consumer demand is also playing a role in deflation. Bank of America found in a recent report that U.S. credit and debit card spending was at its weakest pace in two years. “This is most likely a response to prices being higher overall and Americans tightening their belts to lessen the blow of inflation,” says Howard Dvorkin, CPA, who is the chairman of Debt.com.
With that in mind, here are seven things that finally cost less.
Average price: $1.44 per carton
Decrease: Month over month, in March prices are down 11 percent.
An avian flu outbreak earlier in the year hurt egg production, sending prices surging. That, according to Bailey, isn’t a widespread issue anymore, which has improved supply in the marketplace and driven prices lower. It doesn’t hurt that demand for eggs has eased thanks to skyrocketing prices, which is helping prices fall.
Average price: $2.32 per pound
Decrease: Year over year, in March prices are down about 6 percent.
During the pandemic many farmers thinned their herds to make do, which decreased the amount of milk available to churn into butter. Since then, supply has improved and thus prices have fallen. “Butter is down about 6 percent. I’ve been seeing a lot of promo activity around butter,” says Bailey. “Lower commodity prices are also cycling through butter and dairy products.”