MICHEL MARTIN, HOST:
There's a fire sale on lettuce right now. That was one of the highlights of this week's inflation report.
LEILA FADEL, HOST:
Lettuce producers are trying to win back grocery shoppers who are nervous after a widespread outbreak tied to iceberg lettuce from Mexico. Discounts on leafy greens are one of the factors helping to keep the overall cost of living in check.
MARTIN: NPR's Scott Horsley is with us now to tell us more about this. Good morning, Scott.
SCOTT HORSLEY, BYLINE: Good morning, Michel.
MARTIN: So tell us what's happening in the produce aisle.
HORSLEY: Well, we got a new inflation report from the Labor Department this week, and it shows lettuce prices plunged more than 16% last month. It was the biggest one-month drop on record, and it's all because of that deadly cyclosporiasis outbreak that forced a recall of some imported iceberg lettuce. Since then, anxious shoppers have been steering clear of other kinds of lettuce, and food economist David Ortega of Michigan State University says a lot of suppliers are offering discounts rather than let that lettuce go to waste.
DAVID ORTEGA: Retailers, you know, are going to cut prices in order to move that inventory, particularly because it's also perishable product.
HORSLEY: Produce prices tend to bounce around a lot depending on growing conditions and other factors, and, you know, lettuce prices will probably rebound once this food scare passes. But for now, there are some bargains to be found, and that helped lower grocery prices by about one-tenth of 1% last month. Now, I don't want to overstate this. Obviously, lettuce is a fairly small part of most families' overall grocery list. Ortega notes that supermarket prices in general are still up about 2.7% over the last year.
ORTEGA: We're nowhere near those double-digit increases that we saw in 2022. But, you know, this is still top of mind for many consumers because what they are reacting to is the cumulative impacts of inflation.
HORSLEY: Beef prices, as many people know, are still quite high compared to where they were a year ago. On the plus side, though, chicken prices are down a bit.
MARTIN: OK, but we got to talk about gas, Scott, because high gasoline prices - everybody's talking about it. So what's happening at the gas pump?
HORSLEY: Yeah. Gasoline prices came down a little bit in July, as they did in June, but they are still way up compared to where they were before the war with Iran began. AAA puts the average price of regular gas today at $4.07 a gallon. It's actually been going up again in recent days, and prices could climb further in August unless there's some real progress to get oil moving more normally through the Strait of Hormuz.
Big picture, this week's inflation report shows the cost of living was up 3.4% in July from a year ago. That is a smaller annual increase than the two previous months. But look; inflation is still higher than most of us would like, and that remains a challenge for the inflation fighters at the Federal Reserve.
MARTIN: And the Fed has promised repeatedly that it will get inflation under control. What is that going to take?
HORSLEY: Yeah, not so long ago, investors were betting it was going to take a jump in interest rates. At their last meeting in July, Fed policymakers held their benchmark rate steady. But there were three members of the committee who voted to raise rates. One of those was Beth Hammack, the president of the Cleveland Federal Reserve Bank. Hammack later told Yahoo Finance it would be better for the central bank to act sooner, rather than wait and let inflation get out of control.
BETH HAMMACK: I think about it a little bit like when you're driving your car, when you see that stop sign coming, you can either slowly pump your brakes, or if you're not paying attention, you have to jam on the brakes really fast. You know, my passengers usually prefer when I've got that gentle glide into it.
HORSLEY: But this week's somewhat cooler inflation report could prompt the Fed to coast a little bit longer and see if inflation continues to moderate. Right now, that's the way a lot of investors are betting.
MARTIN: That is NPR's Scott Horsley. Scott, thank you.
HORSLEY: You're welcome. Transcript provided by NPR, Copyright NPR.
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