The worrisome economic news just keeps on coming. Inflation is creeping higher, as prices rise for everything from corn to coffee. The government's Consumer Price Index — a standard measure of how much household goods and services cost — rose 0.4 percent in each of the last two months, the first back-to-back increases that big since the summer of 2008. Now, forecasters say global weather problems and instability in the Middle East could make crude oil, cotton, and other important commodities even more expensive. As businesses start passing on these price hikes to consumers, you'll pay more for some routine purchases. Here are four ways you may be affected:
Clothing prices, after falling for a decade, are expected to rise about 10 percent this spring, according to the Associated Press. The price of cotton has already more than doubled over the past year, largely because bad weather resulted in a disappointing cotton crop. Manufacturers are trying to hold prices down by keeping it simple, with fewer color choices and embellishments, but companies such as Hanesbrands, Levi Strauss, Jones Group, and Polo Ralph Lauren have already begun to raise prices. And stores are set to pass those rising costs. Your underwear is about to get more expensive.
Crude oil prices recently hit a two-year high, as unrest in the Middle East, particularly Libya, fed investor worry about oil production. Gas prices have risen 20 percent over the last year, and could go even higher. While the average price is now $3.17 a gallon, it could be $3.50 to $3.75 this spring, according to Tom Kloza, an analyst at the Oil Price Information Service, as quoted in The Roanoke Times. Heating oil prices have also jumped, and airlines are raising ticket prices to pay for the higher cost of fueling their jets. And increased transportation costs also get reflected in higher prices for...
The cost of staples such as wheat, corn, and sugar has jumped dramatically in recent months, largely because of droughts, floods, and rising demand. World Bank President Robert Zoellick says global food prices have reached "dangerous levels," contributing to unrest in places like Algeria, Egypt, Tunisia, and Yemen. And while food prices in the U.S. haven't climbed much — just 1.5 percent over the last year — that could change very soon. Kellogg's, J.M. Smucker, and McDonald's, among other companies, have already announced they'll be charging more.
Rising fuel and ingredient costs will also translate to higher prices for items such as toothpaste, soap, and batteries. Both Procter & Gamble and Colgate-Palmolive have announced that they will be raising prices this year, says Paul Ziobro at Dow Jones Newswires. Duracell batteries, for example, will cost more starting next month. Better power up now.