The cost of US goods and services spiked in May, as the Consumer Price Index jumped 0.5% for the month and was up 4.2% year over year, but food-at-home price inflation cooled from April, rising 0.1%, according to new data from the Bureau of Labor Statistics (BLS).
The year-over-year CPI jump was the fastest annual increase since April 2023.
The jump was largely driven by energy price increases – up 3.9% in May, 3.8% in April and 10.9% in March – following the beginning of the Iran War.
Food-at-home prices stabilizing?
The CPI report was good news for grocery retailers and CPG, as food-at-home prices remained relatively steady month over month and were up 2.7% year over year in May.
“Today’s CPI numbers for food at home represent a clear cooling from April’s elevated figure and should be welcome news for grocery shoppers facing an otherwise challenging inflationary environment,” said Andy Harig, vice president of Tax, Trade, Sustainability and Policy Development at FMI – The Food Industry Association.
The apparent cooling on grocery price inflation is “coming off what will hopefully be the peak in oil prices that drove food prices higher in April,” Harig said.
Food prices continue to rise
Food-at-home prices appear to be stabilizing, but a number of threats are right around the corner, according to experts. Check out FoodNavigator's 2026 of the CPI, so far.
- A new wave of food inflation is building across the supply chain (May 19, 2026) - April’s rise in grocery prices may be only the beginning of a longer, steeper stretch of food inflation that could surpass historic norms by the year’s end as fallout from geopolitical tensions and tariffs filter through the supply chain and reach consumers at shelf, experts predict.
- Middle East tensions, rising energy and fertilizer costs push grocery prices higher (March 13, 2026) - Grocery prices inched up in February alongside those for energy and key fertilizers – a triple threat for the food and beverage industry as rising tensions in the Middle East disrupt key trade routes just weeks before farmers sow key spring crops.
- A tale of two shoppers: How CPGs price in a K‑shaped economy (March 4, 2026) - As higher-income households gain spending power and lower-income shoppers grapple with persistent food inflation, brands face a critical question: How to grow in a K-shaped economy?
- Food prices see biggest surge in three years, doubling pace of broader inflation (Jan. 15, 2026) - Food prices surged 0.7% in December, marking the largest one-month increase in over three years and more than doubling the broader economy’s inflation rate of 0.3%, according to the Bureau of Labor Statistics’ Consumer Price Index (CPI) released Tuesday.
Half of the six major grocery store food group indexes were up for the month, according to BLS. Fruits and vegetables were up 0.2%, while the cereals and bakery products index rose 0.4% month over month.
Meanwhile, nonalcoholic beverages were up 0.6% in May, and coffee and tea jumped 1.1% for the month.
Dairy prices dropped 0.6% and cheese was down a whopping 2.9% month over month in May. BLS’s meats, poultry, fish and eggs index was down 0.2%.
Threats looming in food
The relatively positive news in food cost inflation was met with caution by Harig, who said a range of factors “continue to place upward pressure on costs throughout the food supply chain.”
Weather-related disruptions, such as drought, diminished snowpack in the West, and an El Niño weather pattern forming could cause agriculture volatility, he said.
“At the same time, the impact of increased fertilizer costs earlier this spring may not be felt on store shelves until this fall and beyond,” according to Harig.
The increased fertilizer costs are linked to the closing of the Strait of Hormuz earlier this year, following US and Israel attacks on Iran. The closure prevented shipments of crude oil, fertilizer and other commodities, causing prices to spike.
“Food companies are also facing increased costs for certain imported ingredients, equipment and packaging materials as tariffs continue to affect critical supply chain inputs. So, uncertainty around food price inflation will likely persist through the summer,” Harig said.
Price increases hit differently
Everyday household purchases (including cleaning supplies and health and wellness products) increased 0.47% in May and 2.9% year over year, according to Chicago-based consumer analytics firm Numerator, which conducts its own Consumer Goods Price Index research.
“While prices can be volatile month over month, consecutive months of acceleration suggest this may not be temporary,” said Paul Stanley, senior economist, Numerator. “Cost pressures are building across everyday goods and placing the greatest strain on low- and middle-income households, a disparity that is unlikely to ease while gas and energy prices remain elevated.”
Inflation continues to be felt more strongly by low-income and Gen Z consumers, with prices for household goods up 34.9% and 38.2%, respectively, for the two groups since January 2018. Those are compared to the national average of 32.9%, Numerator noted.
“High-income households have insulated themselves as inflation has accelerated, experiencing just 0.4% inflation since February 2026 vs. 1% and 1.1% for low- and middle-income households, respectively,” the report added.
Consumers are worried
Consumers remain generally concerned about high grocery prices, but nearly four out of five are reluctant to blame grocery retailers, according to FMI Vice President of Research and Insights Steve Markenson.
“The good news is that 78% of grocery shoppers agree that grocery stores try hard to provide them with options to help them stay within budget – up eight percentage points since December,” he said. “This demonstrates that shoppers believe the food industry is on their side in navigating a challenging food price environment and is a partner in helping them stretch their food dollars.”
