Research
August 12, 2025
Menu Prices
Menu prices grew solidly for the sixth straight month, up 0.3% in July
Consumer prices rose 0.2% in July, easing from June’s 0.3% gain and matching expectations. Food prices were flat after solid increases in May and June, though menu prices continued to climb, rising 0.3% for the month. Grocery prices edged down 0.1%, the second decline in four months. Energy costs fell 1.1%, led by a 2.2% drop in gasoline prices. Gasoline has now declined in five of the past six months, helping temper overall inflation. Year-over-year, headline CPI held steady at 2.7% for the second consecutive month.
Core CPI, which excludes food and energy, rose 0.3% in July, the fastest monthly gain since January and in line with forecasts. On a year-over-year basis, core inflation accelerated to 3.1%, the highest since February and up from 2.9% in June.
Price trends across core categories were mostly higher in July, with notable gains for medical care services (+0.8%), transportation services (+0.8%), household furnishings and supplies (+0.7%), and used cars and trucks (+0.5%). New vehicle prices were flat.
While inflation has edged higher and further price growth is expected, the Federal Reserve has maintained a cautious stance on monetary policy. Policymakers are also mindful of signs of economic softening, including recent labor market weakness. As such, the Federal Open Market Committee is expected to cut short-term interest rates by 25 basis points at its September 16–17 meeting—the first federal funds rate reduction since December. Even so, uncertainties remain, particularly potential tariff-related cost pressures, which could complicate the policy outlook.
In the food away from home category, menu prices at fullservice restaurants rose 0.5% in July for the second straight month, matching the average pace over the past six months. Prices at limited-service restaurants inched up 0.1% in July, down from 0.2% in June and the slowest monthly gain since February 2024. Since February, limited-service menu prices have averaged 0.3% growth per month.
Year-over-year, fullservice menu prices were up 4.4% in July, an acceleration from 4.0% in June and the fastest annual pace since December 2023. Limited-service prices increased 3.3% over the past year. While fullservice prices have trended higher recently, the growth rates for both categories have eased markedly from their peaks: fullservice 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 0.8% in July, extending the robust 2.7% gain seen in June, which had been the strongest since October 2022. In contrast, prices from vending machines were unchanged for the third consecutive month, with prices at other food away from home locations also flat in July.
Year-over-year, prices at employee sites and schools increased 7.4% since July 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 4.4% annual increase in July.
Core CPI, which excludes food and energy, rose 0.3% in July, the fastest monthly gain since January and in line with forecasts. On a year-over-year basis, core inflation accelerated to 3.1%, the highest since February and up from 2.9% in June.
Price trends across core categories were mostly higher in July, with notable gains for medical care services (+0.8%), transportation services (+0.8%), household furnishings and supplies (+0.7%), and used cars and trucks (+0.5%). New vehicle prices were flat.
While inflation has edged higher and further price growth is expected, the Federal Reserve has maintained a cautious stance on monetary policy. Policymakers are also mindful of signs of economic softening, including recent labor market weakness. As such, the Federal Open Market Committee is expected to cut short-term interest rates by 25 basis points at its September 16–17 meeting—the first federal funds rate reduction since December. Even so, uncertainties remain, particularly potential tariff-related cost pressures, which could complicate the policy outlook.
Menu prices continued to rise at a strong pace
Menu prices rose 0.3% in July and have increased an average of 0.4% per month over the past six months. Over the past year, the Consumer Price Index (CPI) for Food Away from Home is up 3.9%. While menu inflation remains firm, it is well below the 8.8% peak in March 2023, the fastest pace in more than two decades.
In the food away from home category, menu prices at fullservice restaurants rose 0.5% in July for the second straight month, matching the average pace over the past six months. Prices at limited-service restaurants inched up 0.1% in July, down from 0.2% in June and the slowest monthly gain since February 2024. Since February, limited-service menu prices have averaged 0.3% growth per month.
Year-over-year, fullservice menu prices were up 4.4% in July, an acceleration from 4.0% in June and the fastest annual pace since December 2023. Limited-service prices increased 3.3% over the past year. While fullservice prices have trended higher recently, the growth rates for both categories have eased markedly from their peaks: fullservice 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 0.8% in July, extending the robust 2.7% gain seen in June, which had been the strongest since October 2022. In contrast, prices from vending machines were unchanged for the third consecutive month, with prices at other food away from home locations also flat in July.
Year-over-year, prices at employee sites and schools increased 7.4% since July 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 4.4% annual increase in July.
Regionally, the Northeast posted the fastest menu price growth in July, with prices up 0.5% for the month. On a year-over-year basis, the West experienced the strongest increases in menu prices, up 4.0%, followed closely by 3.9% annual gains in the Northeast and South. In contrast, menu prices in the Midwest have risen 3.6% over the past 12 months.
