Grocery, gas and electricity prices surge as inflation warnings grow – About Your Online Magazine


The US economy is roaring back to life after stagnating during the pandemic, but there are flashing warning signs that can hit consumers right in the pocket.

Inflation measures – or the prices of goods and services that we all pay for – are rising much faster than experts would like to see. If these price increases get out of hand, the economic boom is likely to come to an abrupt halt.

And many signs of inflation are already here – with prices for groceries, household items, gas and electricity, for example, all skyrocketing in the last year.

It may seem like a complicated concept, but it works in real life: the average price of coffee has increased by almost 8% compared to last year, while the price of bread has risen by 11%, according to data from the Bureau of Labor Statistics. Gasoline rose an astonishing 22 percent.

All of these things have increased in price, while paychecks in general have not.

Price increases appear in the Personal Consumption Expenses Index, or PCE, one of the measures the government uses: it rose 3.5 percent in the first three months of the year compared to a 1.7 percent increase in the same period in 2020.

This is the second fastest increase since 2011 – and well above the 2 percent “right” rate.

Prices are probably rising because of pent-up demand from people who are now emerging from pandemic blocks and are full of money from stimulus payments.

There is also a limited supply of goods as supply chains become clogged – with some countries still battling the virus and not producing the quantity of specific goods that they normally would.

Meanwhile, food prices have already risen 3.5 percent last year and energy prices have risen 13 percent.

The prices of raw materials – such as steel, wood and cotton – that are used in the manufacture of everything are also rising.

The companies have already said that they will pass on the higher costs of these raw materials to consumers.

Signs of inflation are already here in the United States with the prices of groceries, household items, gas and electricity, for example, skyrocketing in the last year

Signs of inflation are already here in the United States with the prices of groceries, household items, gas and electricity, for example, skyrocketing in the last year

The consumer price index, which is the most well-known measure of inflation, rose 2.6% in the 12 months to March - marking the biggest year-on-year increase in three years. Food prices in general have already risen 3.5 percent in the past year and energy prices have risen 13 percent

The consumer price index, which is the most well-known measure of inflation, rose 2.6% in the 12 months to March – marking the biggest year-on-year increase in three years. Food prices in general have already risen 3.5 percent in the past year and energy prices have risen 13 percent

Consumer goods supplier Procter and Gamble, for example, said it would raise prices for items like diapers and women’s care in September because of an increase in the cost of cotton.

And appliance maker Whirlpool has already raised prices by 5 to 12 percent to cope with rising steel costs.

Although Federal Reserve Chairman Jerome Powell insisted that he can keep inflation under control and that any increase will be temporary, economists on both sides of the political spectrum are already predicting the most painful inflation in decades.

Bank of Montreal economists have acknowledged that the Federal Reserve, charged with keeping inflation under control, says that rising inflation will be “transitory” – or fleeting.

“Well, yes, but an earthquake is also transitory,” the newspaper said in a recent note to customers. “When you heat things up, you risk burning yourself.”

Another inflation indicator, the consumer price index, which calculates the prices paid for a basket of commonly used products, is also hotter than experts say is ideal: it rose 2.6% in March compared to the same previous year.

Billionaire Warren Buffett warned on Saturday that he was indeed seeing ‘substantial inflation’ within his business conglomerate, saying: ‘We are raising prices. People are raising prices for us and that is being accepted. ‘

The average American should be concerned with inflation because it affects the value of his dollar: for every tick that goes up, his dollar gets worse.

Some inflation is good – since everyone wants a higher salary, for example – but when it rises too fast, wages do not keep up with price increases.

And when inflation gets out of control – when it expands much faster than the 2% level that the Federal Reserve has set as a general target – it can cause economic problems – even a recession.

Here is a summary of how we are already seeing inflation rising in the US economy:

Groceries:

According to the Bureau of Labor Statistics monthly consumer price index Dice, the average price of bacon was almost $ 6 per pound in March – an 11% increase from last year.

Bread, on average, now costs $ 1.50 per pound, which represents an 11% increase in one year. Half a kilo of coffee costs US $ 4.60, which represents an increase of 8% over the previous year.

The cost of a whole chicken increased by an average of 10% last year, to $ 1.50 a pound.

Meanwhile, a dozen eggs, on average, are now 6.5% more expensive, at $ 1.60 a dozen, while the cost of a gallon of milk has risen 3%.

Bananas now cost about 60 cents per pound, which represents an increase of 3%. Oranges have risen 8% and now cost about $ 1.20 a pound.

The average price of bacon was almost $ 6 per pound in March - an 11 percent increase from last year, according to the Bureau of Labor Statistics' monthly consumer price index data.

The average price of bacon was almost $ 6 per pound in March – an 11 percent increase from last year, according to the Bureau of Labor Statistics’ monthly consumer price index data.

Bread, on average, now costs $ 1.50 per pound, which represents an 11 percent increase in one year

Bread, on average, now costs $ 1.50 per pound, which represents an 11 percent increase in one year

Gasoline and electricity:

The recent increase in the monthly consumer price index was driven in large part by an increase in the price of gasoline.

The average price of gas has increased 22 percent since March 2020, according to data from the Bureau of Labor Statistics.

It now costs, on average, about $ 2.8 per gallon.

Gas prices are only expected to rise.

The Energy Information Administration predicted last month that prices will rise this summer to three-year highs.

Average electricity prices, per kilowatt-hour, increased 3% over last year. The cost now is around 13 cents per kilowatt hour.

GAS PRICES: The average price of gas has increased 22 percent since March 2020, according to data from the Bureau of Labor Statistics

GAS PRICES: The average price of gas has increased 22 percent since March 2020, according to data from the Bureau of Labor Statistics

The recent increase in the monthly consumer price index was driven in large part by an increase in the price of gasoline. The average price of gas has increased 22 percent since March 2020 and now costs, on average, about $ 2.8 per gallon

The recent increase in the monthly consumer price index was driven in large part by an increase in the price of gasoline. The average price of gas has increased 22 percent since March 2020 and now costs, on average, about $ 2.8 per gallon

ELECTRICITY PRICES: Average electricity prices, per kilowatt hour, increased 3% over last year. The cost now is about 13 cents per kilowatt hour

ELECTRICITY PRICES: Average electricity prices, per kilowatt hour, increased 3% over last year. The cost now is about 13 cents per kilowatt hour

Inflation depletes the value of your dollar: this is how it works

Have you ever shopped and noticed that the prices of things you usually buy have gone up? If the items in your shopping basket used to cost $ 100 last year and now cost $ 105, at a very basic level, this is inflation.

Prices are changing all the time, but we don’t say that there is inflation every time we see a price increase.

Instead, we say that inflation occurs when the prices of many of the things we buy rise at the same time and then continue to rise.

So, how do we know when inflation is happening and how much? We do this by looking at the prices of many items over time.

Government statistical agencies regularly collect information on prices for thousands of goods and services.

They then organize prices into categories such as ‘transport’ and ‘clothing’, combine prices in each category and report results on various price indices.

Price indices are just collections of prices.

For example, some indexes contain the prices of the items that consumers buy and others contain the prices of the items that companies buy.

Others contain prices for goods only, while others contain prices for services only, and so on.

If the level of an index is higher now than it was a month or year ago, this indicates that the prices contained in that index are higher on average, which indicates that there is inflation.

Source: Federal Reserve Bank of Cleveland

Household items and supplies:

The cost of household items, such as appliances and furniture, has also increased compared to the previous year.

The average cost of furniture and bedding increased 3.5% last year, according to data from the Bureau of Labor Statistics.

The main appliances, such as refrigerators, increased by 15%. The price of household cleaning products increased by 3%.

The companies behind well-known American brands have said that prices will, or have already, increased due to inflation.

Procter & Gamble, the company behind the Tide, Bounty, Gillette and Pantene products, has already said it will have to increase prices in single-digit percentages starting in September. The increases will affect products for babies and women for adult incontinence.

Tissue maker Kimberly-Clark will also raise product prices to “help offset the significant inflation of commodity costs”. Almost all increases will be introduced in late June and will affect baby and child care, adult care and Scott toilet paper.

Appliance maker Whirlpool has already raised prices by 5 to 12 percent to cope with rising steel costs.

The mattress brand Tempur Sealy also raised prices due to rising costs for chemicals.

‘Clearly, we are dealing with inflation like all manufacturers. Our business model is when we have increased input costs, we pass them on to the final consumer, ‘said Tempur Sealy CEO Scott Thompson. Yahoo Finance.

Construction Materials:

Billionaire Warren Buffett warned that construction companies in his Berkshire Hathaway are already seeing signs of inflation.

Clayton Homes, Benjamin Moore paints and Shaw floors are among the businesses managed by his conglomerate.

Inflation in this sector is rising due to rising costs for raw materials, such as steel, and supply chain issues.

“We are seeing very substantial inflation,” Buffett said at his annual shareholder meeting on Saturday.

“We have nine construction companies, in addition to our manufacturing and operation housing, which is the largest in the country. So, we really do a lot of housing. The costs are just up, up, up. Steel costs, you know, are going up every day.

Appliance maker Whirlpool has already raised prices by 5 to 12 percent to cope with rising steel costs

Appliance maker Whirlpool has already raised prices by 5 to 12 percent to cope with rising steel costs

The manufacture of Tempur Sealy mattresses has also raised prices already due to rising costs for chemicals

The manufacture of Tempur Sealy mattresses has also raised prices already due to rising costs for chemicals

Economists warn that Biden’s gifts to attract the wealthy could overheat an economy that is already growing – and cause inflation to RISE

President Joe BidenA $ 6 trillion spending spree plan could risk overheating the US economy that is already recovering from the COVID-19 pandemic and send a spiral of inflation out of control, some economists warned.

Biden announced three major tax and spending plans that he said will boost the economy, including the $ 1.9 trillion American Rescue Plan to help COVID-19, which has already been approved in the Senate.

He also outlined plans for a $ 2.3 trillion American Employment Plan and a $ 1.8 trillion American Family Plan at a time when the national debt is at its highest level in 76 years.

The Biden government argues that its spending spree can boost the economy without negative side effects, but economists – both liberal and conservative – are warning that it is a gamble.

Many argue that the economy, which is already booming, is now expected to expand so quickly that it could ignite inflation, which is a measure of price increases for goods such as food and gasoline.

Federal Reserve Chairman Jerome Powell has already insisted that he can keep inflation under control and said any increase will be temporary.

But some economists warn that the price will be high if the Biden government and the Fed are wrong.

“A major problem with Biden’s budgetary policy is that it could soon lead to an overheating of the US economy and a return to higher inflation,” said Desmond Lachman, a resident member of the American Enterprise Institute, in a statement to the DailyMail.com.

Sung Won Sohn, an economics expert at Loyola Marymount University, told the Washington Post: ‘The philosophy behind the Biden administration is that everyone can have more. We can have the cake and eat it too. There is no price to pay in terms of inflation, higher interest rates or slower growth.

‘If they are wrong, the price will be very high.’

Some economists argue that the already booming economy must now expand so fast that so much stimulus could cause inflation to skyrocket out of control

Some economists argue that the already booming economy must now expand so fast that so much stimulus could cause inflation to skyrocket out of control

Biden’s plans, which would result in increased taxes for the wealthy and corporations to pay for it, will provide a significant boost for low-income Americans.

There are concerns, however, that such a strong stimulus will cause the economy to overheat and result in rapid price increases.

These price increases may make it difficult for low-income Americans to buy goods, which may force the government to slow growth in an attempt to control inflation.

Inflation means continuous increases in the prices of goods and services. Some inflation is good – since everyone wants a higher salary, for example – but when it rises too fast, wages do not keep up with price increases.

It also erodes the value of every dollar an American earns, which means that any money he saved is worth less.

In the late 1970s and early 1980s in the United States, inflation was so out of control at an annual rate of 14.8 percent that the Federal Reserve, which was then chaired by Paul Volcker, had to step in and increase the country’s interest rate clearly.

The so-called Fed Funds rate is essentially the rate at which banks can borrow from each other – and it affects everything from auto loans to residential mortgages.

When Volcker raised federal fund rates to 20%, he controlled inflation, which fell to 3.2% in 1983. But it also slowed growth and drove the economy into recession. (For comparison, the federal funds rate is now set to zero – allowing “cheap money” to flow into the economy.)

Its actions triggered the worst economic slowdown since the Depression, although it has now been eclipsed by the 2008-2009 financial crisis. Companies and farms have declared bankruptcy and unemployment has risen to more than 10%.

But this is the fear here: that things will get so out of control that the Fed will once again have to raise the basic interest rate and potentially ruin the economy for a generation.

“There is a growing awareness on Main Street that inflation is an issue,” said R. Christopher Whalen of The Institutional Risk Analyst.

‘Everyone knows about the declining markets for financial assets and single-family homes. It seems that stocks with less substance are the ones that benefit the most in the current interest rate environment.

“But sellers and suppliers are starting to raise prices in the face of shortages in supply chains, the precursor to a significant increase in inflation.”

March inflation reading between all items and between separate items

March inflation reading between all items and between separate items

Economic growth accelerated in the first quarter of 2021, growing at an annual rate of 6.4%, the Commerce Department announced on Thursday. As companies were forced to close in March last year, the economy contracted at a record annual rate of 31% in the April-June quarter of last year, before recovering strongly in the months that followed

Economic growth accelerated in the first quarter of 2021, growing at an annual rate of 6.4%, the Commerce Department announced on Thursday. As companies were forced to close in March last year, the economy contracted at a record annual rate of 31% in the April-June quarter of last year, before recovering strongly in the months that followed

Douglas Mackenzie, who lives in Phoenix, told Political he was already seeing price increases while on the road.

‘Inflation is real – restaurants, barbers, grocery stores, fuel and beer – all have seen prices soar above 10% or more since January. Did you buy a glass of wine for less than $ 14? ‘ he said.

The Labor Department reported that wholesale inflation reached its highest annual rate in almost a decade last month.

Still, Biden’s plan to dramatically raise taxes to start a wave of new social programs comes at a time when the economy is already growing rapidly.

Economic growth accelerated in the first quarter of 2021, growing at an annual rate of 6.4%, the Commerce Department announced on Thursday.

It followed a growth rate of 4.3 percent in the fourth quarter of 2020.

The strength of the recovering economy is impressive, considering the damage that the COVID-19 pandemic inflicted from March last year.

As companies were forced to close, the economy contracted at a record annual rate of 31% in the April-June quarter of last year, before recovering sharply in the months that followed.

Economists expect the economy to expand close to 7 percent in 2021, which would be the rapid growth of the calendar year in almost 40 years.

The growth was driven by consumer spending, which increased at a rate of 10.7% as families purchased motorized vehicles, furniture, recreational and electronic products.

Consumer spending, which accounts for more than two-thirds of economic activity, decelerated to an annual gain of 2.3% in the last three months of last year.

Former President Donald Trump’s administration provided nearly $ 3 trillion in relief money early in the pandemic, which led to record GDP growth in the third quarter of last year.

It was followed by almost $ 900 billion in additional stimulus at the end of December.

The Biden government then offered another $ 1.9 trillion bailout package in March.

Although the recovery of the labor market is back on track, it is likely to take a few more years to recover the more than 22 million jobs lost last year.

US employers created 916,000 jobs in March, the biggest increase in hiring since August.

Paula Fonseca