Inflation in the United States moderated slightly as energy and gasoline prices dropped. This is especially true as the consumer price index (“CPI”) jumped 8.5% year over year in July, down from a 9.1% year-over-year increase in June, which was the fastest increase since November 1981.
However, inflation is still near its highest level in four decades and food prices are at the highest annual rate since 1979. The data has put ETFs like First Trust Nasdaq Food & Beverage ETF ( FTXG Quick Quote FTXG - Free Report) , Invesco Dynamic Food & Beverage ETF ( PBJ Quick Quote PBJ - Free Report) , AdvisorShares Restaurant ETF ( EATZ Quick Quote EATZ - Free Report) in focus. Behind the Inflation Numbers
Much of the relief came from declining gasoline prices for more than 50 consecutive days. The gasoline index fell 7.7% in July, marking the largest month-over-month drop since April 2020, while energy prices fell 4.6% over the month. This has brought great respite to travelers as hotel room costs fell 2.7% last month from June, airfares were down nearly 8%, and rental car prices dropped a whopping 9.5%.
But, inflationary pressures remained strong across other components. In particular, grocery prices soared 13.1% year over year — the largest annual increase since March 1979. Prices rose 38% for eggs, 22.7% for flour, 17.6% for chicken, 15.6% for milk, and 9.7% and 9.2%, respectively, for ground beef and bacon. Fruits and vegetables became 9.3% more expensive. Dining out costs also rose with a 7.6% rise in menu prices over the past year. Meanwhile, the cost of shelter, which comprises nearly a third of the index, continued to rise, increasing 5.7% over the year (read: 5 ETFs That Gained Investors' Love to Start August). The so-called core inflation, which strips out volatile components such as food and energy prices, rose 5.9% from the year-ago level, in line with June’s gain. ETFs in Focus First Trust Nasdaq Food & Beverage ETF ( FTXG Quick Quote FTXG - Free Report) First Trust Nasdaq Food & Beverage ETF offers exposure to U.S. companies within the food and beverage industry. It tracks the Nasdaq US Smart Food & Beverage Index, holding 30 securities in its basket, with each accounting for less than 9% share (read: 5 ETFs With More Than 1000% AUM Growth This Year). First Trust Nasdaq Food & Beverage ETF has AUM of $845.8 million and charges 60 bps in annual fees. It sees an average daily volume of about 108,000 shares and has a Zacks ETF Rank #3 (Hold). Invesco Dynamic Food & Beverage ETF ( PBJ Quick Quote PBJ - Free Report) Invesco Dynamic Food & Beverage ETF offers exposure to 30 stocks engaged in the manufacture, sale or distribution of food and beverage products, agricultural products and products related to the development of new food technologies by tracking the Dynamic Food & Beverage Intellidex Index. With AUM of $307 million, Invesco Dynamic Food & Beverage ETF charges 63 bps in annual fees from investors and sees a light average daily volume of 82,000 shares. PBJ has a Zacks ETF Rank #3 with a Medium risk outlook. AdvisorShares Restaurant ETF ( EATZ Quick Quote EATZ - Free Report) AdvisorShares Restaurant ETF is an actively managed and the only ETF investing exclusively in the restaurant and foodservice industry, including restaurants, bars, pubs, fast food, take-out facilities, food catering services and more. AdvisorShares Restaurant ETF holds 26 securities in its basket with a higher concentration on the top firm (read: ETFs & Stocks to Win on Uptick in June Retail Sales). AdvisorShares Restaurant ETF has gathered $3 million in its asset base. EATZ charges 99 bps in annual fees and trades in an average daily volume of 1,000 shares.