Menu Prices

Consumer prices rose 0.3% in June, the fastest monthly gain since January and up from 0.1% in May. Food prices increased 0.3% for the second straight month, while menu prices rose 0.4%. Energy costs rebounded, climbing 0.9% after a 1.0% drop in April. On a year-over-year basis, overall inflation accelerated to 2.7% in June, up from 2.4% in May and the highest since February.

Core CPI, which excludes food and energy, increased 0.2% in June after a 0.1% gain in May. Year-over-year core inflation ticked up to 2.9%, the highest reading since February and a slight acceleration from 2.8% over the prior three months.

Price trends across core categories were mostly higher in June. Notable increases included household furnishings and supplies (+1.0%), medical care services (+0.6%), apparel (+0.4%), shelter (+0.2%), transportation services (+0.2%), and medical care commodities (+0.1%). In contrast, prices declined for used cars and trucks (-0.7%) and new vehicles (-0.3%).

With inflation ticking slightly higher and further price growth expected, the Federal Reserve is likely to maintain a cautious stance on monetary policy. While the Federal Open Market Committee has signaled potential rate cuts later this year, a reduction at its upcoming July 29–30 meeting appears unlikely. Adding to the uncertainty, potential tariff-related cost pressures could complicate the inflation outlook in the months ahead.

Menu prices rose strongly again in June
Menu prices rose 0.4% in June, matching the average monthly pace of the past five months and extending a steady upward trend. Over the past year, the Consumer Price Index (CPI) for Food Away from Home increased 3.8%. While menu inflation remains firm, it is well below the 8.8% peak reached in March 2023, the fastest rate in more than two decades.

Meanwhile, grocery prices increased 0.2% in June (seasonally adjusted), marking the second consecutive monthly gain. (On a non-seasonally adjusted basis, prices were up 0.3% in both May and June.) Year-over-year, the CPI for Food at Home rose 2.4%, the highest in three months. While grocery inflation has cooled significantly from its 13.5% peak in August 2022, it remains a key consideration for both consumers and restaurant operators.
 

In the food-away-from-home category, menu prices at fullservice restaurants jumped 0.5% in June, up from 0.3% in May. The June pace matched the average seen over the past 5 months. At the same time, prices at limited-service restaurants increased by 0.2% for the month, a three-month low, with an average of 0.3% growth per month since February.

On a year-over-year basis, fullservice menu prices were up 4.0% in June, pulling back for the second straight month from April’s 4.3% rate, which had been the highest in 15 months. Limited-service prices increased 3.5% over the past year. While both segments continue to see elevated inflation, the pace of growth has moderated significantly from recent peaks: full-service prices surged as high as 9.0% year-over-year in 2022, while limited-service prices peaked at 8.2% in April 2023.
 

Within the broader food-away-from-home category, prices for food at employee sites and schools jumped 2.7% in June, the strongest monthly gain since October 2022. In contrast, prices from vending machines were unchanged for the second consecutive month, while prices at other food away from home locations rose 0.5% in June.

Year-over-year, prices at employee sites and schools increased 6.7% since June 2024. At the same time, vending and mobile vendor prices rose 5.0% year-over-year, while the broader “other food away from home” category posted a 4.6% annual increase in June.   

 

Regionally, the West posted the fastest menu price growth in June, with a 4.1% year-over-year increase, followed by strength in the South, with 3.9% growth. Meanwhile, menu prices increased 3.5% year-over-year in the Northeast, with 3.7% growth in the Midwest.