We have record high unemployment, stagnant job growth, and inflation............what's NOT to like?
That's pricey: 13 items that cost more, or will soon
By Dave Carpenter
Four dollar gasoline is just a part of it. As most any shopper knows, prices are climbing for everything from coffee and chocolate to tires and toilet paper.
Paul Sakuma, AP
The Consumer Price Index has climbed 2.7% in the past 12 months, according to government statistics released Friday. That’s the largest rise since 2009.
Price increases will continue in the months ahead as companies pass along the higher costs of raw materials, transportation and other expenses.
“When prices at the pump rise and wages don’t, already strained budgets show the pain,” says Diane Swonk, chief economist at Mesirow Financial in Chicago.
This creeping inflation doesn’t yet alarm most economists, who don’t expect high inflation in the near future. That’s because many businesses are still wary about boosting prices when workers are getting meager raises, if any, and unemployment remains near 9%.
But even modest increases can pack a wallop with consumers in a tenuous financial position, says Scott Hoyt, senior director of consumer economics at Moody’s Analytics. “The increases in prices are going to be felt more severely now than if we were in a stronger economic environment.”
Consumer price index
Here is a snapshot of some areas where prices are rising. More hints of what’s in store will come as corporations report quarterly earnings over the next several weeks.
AIRFARES
Airlines have been raising ticket prices steadily to pass on the expense of higher fuel costs. Domestic round-trip fares were boosted a half dozen times this year by $4 to $10 each. Over the six months that ended in February, fares jumped 22%, according to the Bureau of Labor Statistics’ index.
CHOCOLATE
Hershey’s raised its wholesale prices nearly 10% in late March. Consumers may not feel the pinch until after the big Easter season, because many retailers will be able to make purchases at the old prices for about eight weeks.
COFFEE
Coffee prices jumped 27% between December and March as companies passed along their record cost of unroasted beans. Starbucks boosted the prices it charges retailers for packaged coffee up to 12% — its first increase in three years. J.M. Smucker, which sells Folgers and Dunkin’ Donuts brands, has raised prices several times during the past year. Sara Lee, Kraft Foods and Green Mountain Coffee Roasters also have hiked prices.
FAST FOOD
Paying more for burgers? You will soon if you aren’t already. McDonald’s, like many of its peers, is dealing with higher ingredient costs and expects to raise U.S. prices this year. Rival Wendy’s/Arby’s is expected to raise prices later this year because of what it says will be 15% higher beef costs.
FRUITS AND VEGETABLES
Even adjusting for seasonal factors, the cost of fruits and vegetables has risen 23% in three months, including bananas up 10% and potatoes up 39%.
FURNITURE
Furniture manufacturers such as Ethan Allen and La-Z-Boy are increasing prices up to 7% due to higher costs of cotton, yarn, leather and steel.
GASOLINE
$5 gas, anyone? Not yet, but it may be coming. Gasoline prices leaped 6% last month and have risen 28% in the past year. Consumers paid an average price of $3.81 a gallon nationwide on Friday, according to the travel group AAA.
HOUSEHOLD PRODUCTS
Diapers, soap, toilet paper, toothpaste, trash bags and many other everyday items all have been targeted for price hikes as companies from Kimberly-Clark to Procter & Gamble to Colgate-Palmolive respond to rising ingredient costs.
INSURANCE
State Farm and Allstate, the nation’s two biggest home and auto insurers, are pursuing further price hikes. State Farm just pushed through an average rate hike of 18.8% for Florida homeowners and is seeking double-digit rate hikes in select other states. Allstate has been raising its auto insurance rates in numerous states. It’s also aiming to impose more homeowners’ increases after already raising rates an average of 7% in 10 states in the fourth quarter of 2010 — citing a need to make up for the surge in weather-related losses.
JUICE
Tropicana, owned by PepsiCo, said last month it’s raising prices on some of its juices 4% to 8% to cope with higher costs due to cold weather damage of Florida citrus crops. That means shoppers are paying more for Tropicana and Dole fruit juices.
Coca-Cola already had increased prices this year for its Minute Maid and Simply brands in the U.S. 4% to 8% to cope with higher costs for commodities, fuel, packaging and fruit.
PACKAGED FOODS
Rising prices for corn, wheat and many other ingredients, along with fuel, have led to higher prices for packaged goods. Among those announcing price hikes: B&G Foods, maker of fruit spread, canned goods and sauces; ConAgra Foods, whose brands include Banquet, Chef Boyardee, Healthy Choice and Peter Pan; General Mills, maker of Nature Valley snack bars and Cheerios cereal; H.J. Heinz, world’s largest ketchup maker; Kellogg, which makes Frosted Flakes, Pop Tarts and other foods; spice maker McCormick; and Sara Lee, the maker of frozen desserts, Hillshire Farms lunchmeat and Senseo coffee.
Safeway, Supervalu and other supermarkets are passing the higher costs along to customers.
SOFT DRINKS
Big beverage makers are hiking prices because of higher costs for packaging, ingredients and transportation. The price of carbonated drinks was up 14% from December to March.
TIRES
U.S. tire prices climbed 6% in the six months ended in March. Cooper Tire & Rubber boosted prices 8% to 9% last month — its second increase this year. At the time of the announcement the company said natural rubber prices had increased more than 75% in a matter of months.
Copyright 2011 The Associated Press.
