Manufacturers of everything from cereal to refrigerators say they have absorbed price increases as long as possible and will now start passing along those costs to consumers.
Who's to blame? It depends. A cold snap in Mexico means potential shortages and higher prices for cucumbers and tomatoes. The Chinese economy is growing strongly, and it is gobbling up everything from oil to grains to metals.
Bad weather for cotton growing in Pakistan, China and Australia is fueling a historic rally in cotton. Cotton prices have doubled over the past year and will certainly translate into higher prices for T-shirts and underwear.
Hanes, Nike, and Polo Ralph Lauren are just some of the brands whose prices will rise, because of price increases for cotton, wool and cashmere.
A Brooks Brothers wrinkle-free shirt once cost $79.50. Today it costs $88.
Starbucks and McDonald's also have told investors on their earnings calls they will be raising prices this year. McDonald's said it will raise prices on coffee and food items "where it makes sense."
Spiking sugar prices and political unrest in cocoa exporter Ivory Coast have candy makers cautiously watching developments heading into the important Easter candy and chocolate season.
A one-month export ban on cocoa from Ivory Coast last month did not affect Valentine's Day, but candy maker Mars on its website says, "We continue to have concerns regarding the political situation that exists within Cote d'Ivoire."[cnn-videoÂ url="http://www.cnn.com/video/#/video/world/2011/01/24/mabuse.cocoa.ivorycoast.cnn"%5D
Big-ticket purchases are affected, too. Appliance makers LG and Whirlpool have said they are charging more because of higher metals prices.
Soaring grain prices mean meat and dairy costs are rising. Â Some blame so-called "hot" money in commodities, fueled by the Federal Reserve's epic effort to pump money into the system to help the U.S. economy.
"All commodities to varying degrees are stores of value and in general are priced in U.S. dollars,"Â says economist John Ryding of RDQ Economics. "When the Fed keeps interest rates at effectively zero and prints $600 billion through QE2 (a second round of quantitative easing), investors, traders and speculators are likely to purchase other stores of value, and this is the essential process behind the general rise in commodity prices."
Hot commodities are only part of the story.
Labor costs are rising in some emerging markets where American companies built factories, shipping costs are up as oil prices rise, packaging costs are rising, and a generally improving economy means businesses are more comfortable raising prices.
Still, it's a delicate task to raise prices when consumers are still so price-sensitive. Some of these price increases will be overt - more for T-shirts, underwear and shoes. Others will be less glaring - you may see prices for processed food stay the same, but there may be fewer manufacturer coupons.
Economist Ryding says there is no doubt that these prices will translate into higher consumer inflation.
But official forecasts for inflation are still pretty tame. The U.S. Department of Agriculture officially forecasts that food prices in the U.S. will rise 2% to 3% this year.
great! what next. i heard the price of air is fixing to rise.
And our government says inflation is not a problem...
Our government (USA) is clueless.
Inflation is here to stay. I want to marry my male camel, abu, because I love it and I am gay.......GAY PRIDE.....
next thing we know the price of gas is going to go up...
Colbert was funny. 'gas prices might go up 10 cents? CRUSH the rebellion!'
Tell us something we *don't* know. Prices have been steadily rising on everything for, at least, the past two years. The price of gasoline goes up, so do the prices. Price of gasoline goes down... prices for everything else *don't* go down! Seems like ever since our last election, USA has gone to hell in a hand-basket.
Lol. Prices have been going up since i was born. Again, not obama's fault
Inflation is not the only problem. Camels are getting less friendly.
And this is news? Give me a break, prices have been rising and packaging for food items have been getting noticably smaller again for the last two years. Affectively causing prices to go up even more than the government admits. It's pretty clear the politicians and government agnecy heads we have in Washington need to do their own grocery shopping more often, rather than have their private house staff do it for them. If they di thay would notice how much prices really have risen for less and less product.
Anyone who has been to the grocery store, the service station or the hardware store has know for two years that inflation is alive and well. But with the situation we have now, we "ain't seen nothing yet".
Chocolate eaters and coffee drinkers should blame high price and products shortage on the UN, its owners. They want to put in another puppet dealer ADO in the Ivorians president's seat. Starving the natives to force a change of another regime by sanctioning the sale of coffee and cocoa from cote d'ivoire. Ivorians control 40% of the world chocolate and coffee. If they don't sell, kids will be mad over high prices. Please em colonial idiots france and ADO!!!
Cote d'ivoire just lost 100,000 tons of cocoa beans last month. Who said politicians have any commonsense? They refucing to respect Ivorians SUPREME LAW AND THE RECOUNT OF THE VOTES, BUT THEY UNLEASHED SANCTION ON tHE NATION BEFORE FIND THE TRUTH AND A SOLUTION TO THE ONGOING POLITICAL PROBLEM. THIS IS AS REVERSE, AS PUNISHING A MILLIONS OF PEOPLE IN THE COURT OF LAW BEORE FINDING THE ACTUAL CRIME THEY'VE ACCUSED OF. LIFT THE SANCTION, FIND THE TRUTH, THEN SEE IF ANYONE SHOULD BE PUNISHED SINCE THE IVORIANS SUPREME COURT IS BEING DISREGARDED. LOGIC.
Its all good.. The internet is only dollars per month. Prices are falling in fact. Food and fuel are still far cheaper than most countries and you can always get a better discount than wallmart at your uncles local px.. The stock market rises and big media companies have still got big profit advertisers and there are plenty of jobs for the racing stripe nascar youth thanks to attenuated immigration policy. God bless.
True, I have noticed that. Camels are becoming less friendly.
I enjoy a zagnut bar while listening to Led Zepplin... .
*The men who ate the world: why foodstuffs have shot up in priceâ€Ž – "This is London' 9 Feb 2011: "The hedge fund guy, "We're piling into food. "Weather's getting weird, so there'll be crop failures. There won't be enough to go around."
Unilever, a large food corp: I suggest you do a News search on Unilever.
*Unilever is in a $3.7 billion takeover of Alberto Culver Co, so that may be part of the price increase that is passed onto the consumer. Reuters – Tom Hals – Jonathan Stempel – 4days ago The requested fee in a lawsuit challenging Unilever NV's $3.7 billion takeover of Alberto Culver Co is part of a cottage industry.