Americans have been feeling the burn from inflation — but it's not dampening their celebrations heading into the Fourth of July holiday weekend. Prices have dramatically eased since the soaring inflation this time last year — but it's still a mixed picnic basket for Independence Day.
Eighty-seven percent of Americans plan to celebrate the holiday this year, according to the National Retail Federation, the most since before the coronavirus pandemic. Sixty-five percent of those celebrating said it would be with some type of cookout, and consumers surveyed plan to spend an average of $93.34 on food per person for the holiday.
While the increase in food prices has slowed since this time last year, it still won't be cheap to host a cookout this Fourth of July. Grocery prices overall are up 5.8% from a year ago, but the pace of increases has slowed to about half of what it was last summer at 12%.
For those firing up the grill, there are big differences depending on the type of meat going on it, said Michael Swanson, Wells Fargo's chief agricultural economist. When it comes to beef, the industry does not have enough cattle. But for chicken, the industry has been fast to respond to international competition.
Sirloin steak costs $10.75 per pound, up 2.9% from a year ago, according to the Wells Fargo Fourth of July Food Report, which Swanson wrote. But the heat is down from last summer, when it hit 14%. If the protein of choice is a hamburger, the average cost of ground beef per pound is currently $5.36 – up less than 1% from a year ago. The inflation rate for beef last year: 16%. Unfortunately, making it a cheeseburger still adds to the price increase – processed cheese per pound is up 10% from last year.
For those looking to spend less, Chicken breast actually declined nearly 2% in price from last year. It now costs $4.24 per pound, according to the report. And if egg salad or deviled eggs are on the menu, egg prices at $2.67 a dozen are now down 7% from a year ago, thanks to a recovery from the avian flu.
Egg prices "are going to soften some more," Swanson said. "It's not going to get radically cheap because they're still dealing with high feed costs, but it's really been a win for the consumer."
Looking at the snack table and fixings, sticker pain still remains on the menu. Wheat price increases have eased some since skyrocketing with the invasion of Ukraine, but bread costs 22% more than a year ago. Luckily, it still sits at less than $2 a pound. Chocolate cookies are up 14% from a year ago and potato chips are up 15% from a year ago. Dips and condiments are up 9%. And for those screaming for ice cream, it's up 9%.
"Dairy is probably still one of the highest inflation buckets that we have currently, but when you look at what the dairymen are being paid right now for their milk as they deliver it to the factories — turned into cheese or ice cream — it's dropped," Swanson said. He expects dairy prices to go down quickly over the next few months.
The price of soft drinks has started to slow – but is still up from last year. Beer prices are also up – but if it's wine on the menu – those prices have remained relatively unchanged.
There is good news overall expected on the horizon. Come the next big food holiday, Thanksgiving, Swanson expects there will be flat overall prices from a year ago and a number of categories will be down as supply chains come back to full competency.
And while most food prices remain up for July Fourth, 4 million more Americans are employed than a year ago, making for an easier time in the checkout line.
AAA projects a record 50.7 million Americans plan to travel 50 miles or more from home this Fourth of July weekend. That's up 2.1 million people for the holiday compared with 2022 and breaks the previous record set in 2019 before the pandemic.
It will also set a new record for the number of Americans expected to travel around the Fourth of July by car. AAA expects 43.2 million people to drive an increase of 2.4% from last year and 4% above 2019. This comes as gas prices are down dramatically from their peak last summer – when the average for a gallon of regular gas hit a record $5.01 in June 2022.
Gas prices for the Fourth of July are projected to be at least $1.30 lower than they were a year ago. The national average estimate for the holiday is $3.49 per gallon — a massive saving from 2022.
Drivers hitting the road for the weekend between June 30 and July 5 will spend $2.6 billion less on gasoline than they spent over the same period last year, according to GasBuddy.com. That's more than $500 million a day.
"On average, a tank of gasoline for a mid-size vehicle is about $20 less than it was a year ago," said GasBuddy's Patrick De Haan. "An average tank now in some of the cheaper states is as little as $44 to fill your tank, but in some of the more expensive states, about $76 to fill your tank."
De Haan said 47 out of 50 states are seeing gas prices more than $1 lower than a year ago. Prices are expected to drop even further by Labor Day, barring changing external risks like the hurricane season or war in Ukraine.
CBS News reporter covering economic policy.
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