July 15

7/15 – On Friday, the Bureau of Labor Statistics reported that inflation eased a bit in June, with the Consumer Price Index up 3.0% from a year ago. The CPI hit a 40-year high of 9.0% just two years ago in June 2022. The easing inflation rate, combined with a rising unemployment rate, means the Federal Reserve will likely start cutting interest rates soon. According to the CME’s FedWatch Tool, the odds of at least one rate cut by Sept are now 96.3%. A Wall Street Journal poll of 68 economists showed a consensus forecast for the CPI to drop to 2.5% by year’s end. Unfortunately, the bad news for food service is that the cost of food away from home jumped 0.4% in June and is now 4.1% higher than a year ago - while the cost of food at home is up just 1.1% from last year. Consumer pushback on menu prices, combined with falling customer counts, will certainly continue to squeeze restaurant profits.