“Creeping up” means something different to Paul Davidson of USA Today than it does to me. Food prices are going up at a rapid pace but because the government’s inflation figures (which conveniently leave out food prices) are ginned up to show low inflation people like Davidson can write dross like this:
The near-zero inflation era may be ending. Prices are rising slightly, and economists expect a steady climb as the recovery gains steam.
In recent earnings reports, some retailers and manufacturers have said they’re boosting prices this year on clothing, groceries and other items after holding firm in 2010.
The uptick is largely driven by surging food, energy, cotton and other global commodity prices as economic growth heats up significantly in China and emerging markets.
[…]
he consumer price index in December rose 1.5% from a year ago, the most since May. Yet, wholesale prices for finished goods jumped 4%, indicating firms were squeezed. Federal Reserve Chairman Ben Bernanke dismissed inflation worries on Thursday.
Paul Ashworth of Capital Economics expects 2% inflation this year, still well below pre-recession rates of 3% to 4%. But higher food and gasoline prices could trim consumer spending by two-tenths of a percentage point, he says. Among those raising prices:
•VF Corp., maker of Wrangler and Lee jeans, plans to raise prices as denim costs have been pushed up by soaring cotton prices. “The idea is not to raise prices enough to send consumers back to their hidey holes,” says Vice President Cindy Knoebel.
•Grocer Supervalu is raising prices from 3% for items such as cereal to as much as 14% for cooking oil. “We simply cannot absorb these continuing cost increases ourselves,” says spokesman Jeff Swanson.
•UPS, citing a 26% jump in 2010 fuel costs, plans to raise its fuel surcharge Monday to 6% from 5.5% for ground packages and to 10% from 9% for air service.
•Tire costs for retailer Hogan Tire in Northern Virginia jumped 18% each of the past three years due partly to rising rubber costs. It’s raised prices and cut margins 3% in three years. Tire revenue is off 12% as consumers switched to low-price brands.
Even that doesn’t sound like a “slight” increase. But look at these futures prices via Zero Hedge:
One of the benefits of America finally seeing what Zimbabwe went through as it entered hyperinflation, ignoring for a second that the Zimbabwe stock market was the best performing market, putting Bernanke’s liquidity pump to shame, is that very soon everyone will be naked, once companies finally realize they have no choice but to pass through surging input costs. And while some may be ecstatic by the S&P’s modest rise YTD, it is nothing compared to what virtually every single agricultural product has done in the first month of 2011. To wit: Corn spot up 7.76%, wheat up 5.63%, Rice up 10.08%, Hogs up 10.16%, Sugar up 5.64%, Orange Juice up 3.33%, and cotton…. up 17.08%. That’s in one month!
As usual there’s charts to view so pop over and check it out. None of this seems like a “creep” in prices to me. Inflation is much higher than economists claim.