Released: June 18, 2007

Food costs take bigger bite of budgets

Source: Barbara Hagenbaugh, USA Today

Food and beverage costs rose 3.9% in May from a year earlier, outpacing the overall inflation rate by more than a full percentage point and is the biggest increase in three years, the Labor Department said Friday. Costs for a variety of goods, including meat, milk, soft drinks and fresh fruit all rose from April.
Higher prices are being seen not only at grocery stores, but also at restaurants. The cost of dining out has risen 3.3% in the last year.

A combination of forces, including bad weather, heightened demand for corn to produce ethanol, strong buying from consumers and higher energy costs, is boosting prices.

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