Menu Prices

Consumer prices rose 0.2% in April, matching expectations and marking a modest increase after a slight 0.1% decline in March. On a year-over-year basis, inflation eased to 2.3%i, ts lowest level since February 2021.

Food prices edged down 0.1% in April, driven by a 0.4% decline in grocery prices. However, restaurant menu prices continued to climb, rising 0.4% for the third consecutive month. Energy costs were mixed: electricity and natural gas pushed overall energy prices up 0.7%, while gasoline prices dipped 0.1%, extending their decline to a third straight month.

Core CPI, which excludes food and energy, rose 0.2% in April, up slightly from 0.1% in March. Core inflation held steady at 2.8% year-over-year, the slowest pace since March 2021.

Price trends within core categories were uneven. Increases were seen in medical care services (+0.5%), medical commodities (+0.4%), shelter (+0.3%), household furnishings (+0.2%), and transportation services (+0.1%). Meanwhile, prices fell for used cars and trucks (-0.5%) and apparel (-0.2%), while new vehicle prices were flat.

The Federal Reserve is maintaining a cautious posture, signaling that rate cuts remain possible later this year but are unlikely at its next meeting on June 17–18. Potential tariff-related cost pressures could complicate the inflation outlook in the months ahead.

Menu and grocery store prices rose strongly again in April 

Menu prices rose 0.4% in April for the third consecutive month. Over the past year, the Consumer Price Index (CPI) for Food Away from Home increased 3.9%, edging up from 3.8% in March and reaching the highest annual rate since September. While menu inflation has accelerated in recent months, it remains well below its peak of 8.8% in March 2023, the highest in over two decades.

In contrast, grocery prices declined 0.4% in April, reversing the 0.5% gain seen in March. The CPI for Food at Home rose 2.0% year-over-year, down from 2.4% in the previous month. Grocery inflation has decelerated sharply from its August 2022 peak of 13.5%, a notable shift for consumers and operators alike.

In the food-away-from-home category, full-service restaurant prices jumped 0.6% in April for the second consecutive month. In contrast, prices at limited-service establishments rose a more modest 0.3% in April, up from 0.2% in March.

Full-service menu prices have climbed 4.3% year-over-year, the highest annual increase in 15 months. Limited-service prices, meanwhile, are up 3.4% over the past 12 months. While both figures reflect ongoing inflation, they remain well below recent peaks: full-service prices surged as high as 9.0% year-over-year on several occasions in 2022, while limited-service prices hit a high of 8.2% in April 2023.

Within the broader food-away-from-home category, prices for food from vending machines and mobile vendors jumped 1.2% in April, extending the 2.0% gain seen in March. In contrast, prices at employee sites and schools were flat for the month.

Over the past year, vending and mobile vendor prices have climbed by a very solid 6.5%. Prices for food at employee sites and schools are up 3.7% year-over-year, while the broader “other food away from home” category saw a 4.8% annual increase in April.  

Regionally, the West recorded the fastest menu price growth, with a 4.4% year-over-year increase in April. At the other end of the spectrum, the Midwest and the South saw the slowest paces, with menu prices rising 3.6% over the same period. The Northeast posted 4.0% growth oni menu prices over the past 12 months.