ADVERTISEMENT

Double-Digit Inflation Ahead? Are You Worried?

Nov 28, 2010
83,700
37,523
113
Maryland
Prices are rising as high demand runs up against constraints on the availability of goods and services across the U.S. economy.

Price tags on consumer goods from processed meat to dishwashing products have risen by double-digit percentages from a year ago, according to NielsenIQ. Whirlpool Corp. freezers and dishwashers and Scotts Miracle-Gro Co. lawn and garden products are also getting costlier, the companies say. Some consumers are feeling stretched.

Kaitlyn Vinson, a program manager in Denver, said her recent $275 bill at a Costco Wholesale Corp. store, which included razors and cotton pads on top of her typical grocery list, was more expensive than usual. Ms. Vinson said she switched from buying fresh to frozen fruit and vegetables because they are less expensive and last longer.

“We’re sacrificing the food that I really like to cook just to be cheaper,” she said.

Costs are rising at every step in the production of many goods. Prices for oil, crops and other commodities have shot up this year. Trucking companies are paying scarce drivers more to take those materials to factories and construction sites. As a result, companies are charging more for foods and consumer products including foil wraps and disposable cups.

Kellogg Co., maker of Frosted Flakes, Cheez-Its and Pringles, said Thursday that higher costs for ingredients, labor and shipping are pushing it and other food makers to raise prices. “We haven’t seen this type of inflation in many, many years,” Chief Executive Officer Steve Cahillane said.

Investors and economists are watching whether the higher prices drive up broader measures of inflation, which have been muted for years.

Consumer prices jumped 2.6% in the year ended in March, according to the Labor Department, the biggest 12-month increase since August 2018.

As higher costs ripple through supply chains, more companies are concluding that their customers will accept higher prices. “They’ve seen price increases throughout the entire store,” Whirlpool CEO Marc Bitzer said. “I don’t think anybody is surprised right now.”

Warren Buffett, CEO of Berkshire Hathaway Inc., said during the conglomerate’s annual meeting May 1 that the economy is experiencing a substantial run-up in prices. “We’re raising prices, people are raising prices to us, and it’s being accepted,” Mr. Buffett said. “It’s an economy really that’s red hot, and we weren’t expecting it.”

Federal Reserve Chairman Jerome Powell said on April 28 that inflationary pressures resulting from supply-chain problems would likely be temporary and wouldn’t prompt the central bank to change policies aimed to keep borrowing costs down.

Some manufacturers didn’t pass higher costs along to consumers in the thick of the coronavirus pandemic last year partly because they didn’t want to charge people more for staples during a crisis, said Chris Testa, president of distributor United Natural Foods Inc. Instead, many manufacturers pulled back on discounts. Now, some food and consumer-product makers are raising prices by up to 10%, he said.

Costs for apples are up 10% to 20% depending on the variety, said Mike Ferguson, vice president of produce and floral at Topco Associates LLC, an Elk Grove Village, Ill.-based cooperative of more than 40 food companies including grocer Wegmans Food Markets Inc. Bananas and leafy greens are more expensive too, Topco said, while vegetable oils and oil-heavy products like salad dressing and mayonnaise are also getting pricier in part because of higher ingredient prices.

“Our overall goal is to cover cost increases,” said Jon Moeller, operating chief at Procter & Gamble Co. Procter & Gamble is raising prices on baby products, adult diapers and feminine-care brands.

Competitor Kimberly-Clark Corp. said it would increase prices by mid-to-high single digits on Scott bathroom tissues, Depend adult diapers and Huggies baby-care products.

H. Kenneth Fleetwood, a songwriter in Nashville, said he has shifted to buying more generic staples such as detergent and recently shopped around for a television and monitor for his studio before finding the lowest price at Walmart Inc.

“Penny-pinching is becoming the name of the game,” he said.

Devon Dalton, a sales director in Charlotte, N.C., said he is also buying more store brands and signed up for a fuel-savings program that gives him cash rewards at gas stations after he and his wife recently paid $20,000 more than the listing price to buy their first home.

“Everything is getting a bit tighter,” Mr. Dalton said. “We’re trying to think what would be a good way to stay smart with our money.”

Restaurant prices are rising, too. High demand for wings and a spate of new fast-food chicken sandwiches is pushing up chicken prices. Takeaway containers and coolers are more expensive than usual because production of resin, a key ingredient in plastic, was disrupted by winter storms in the South this year. Chipotle Mexican Grill Inc. said in April that it had raised prices for delivered food by 4%.

Kevin Hourican, CEO of food-distributor Sysco Corp., said that even at higher prices the pent-up demand for restaurants is enormous. “People feel bad for their local restaurants. They want to support them,” he said.

Khisna Holloway, an office manager for a school in Los Angeles, recently ate at a Mexican restaurant with her husband for the first time in more than a year. She noticed her preferred combo of cheese enchilada and chili relleno cost about $4 more than the last time she visited. She didn’t mind.

“It felt like a treat,” she said.

Some people are delaying purchases, hoping prices will recede.

Nick Davison said he bought a graphics card for his computer for about $400 in February 2020. He said similar components now sell for more than $1,000 on eBay. He wants to build a second computer to mine cryptocurrency, but plans to wait to see if component prices decrease.

“It doesn’t seem smart to spend that much money on something that may go down in the future,” he said.

Source: WSJ via MSN
 
Will this actually happen, though? I imagine that consumer demand must have skyrocketed after WWII. Did the economy see runaway inflation then? Certainly the pandemic can't have been the only time we have seen huge demand. It seems like we may have ebb and flows as we recover, but sustained inflation seems unlikely.
 
Will this actually happen, though? I imagine that consumer demand must have skyrocketed after WWII. Did the economy see runaway inflation then? Certainly the pandemic can't have been the only time we have seen huge demand. It seems like we may have ebb and flows as we recover, but sustained inflation seems unlikely.
It's not just the demand though. After WWII there was plenty of workforce. It's the supply and demand that will cause this.
 
Will this actually happen, though? I imagine that consumer demand must have skyrocketed after WWII. Did the economy see runaway inflation then? Certainly the pandemic can't have been the only time we have seen huge demand. It seems like we may have ebb and flows as we recover, but sustained inflation seems unlikely.
When do you expect trillion dollar deficits to ebb?
 
  • Haha
Reactions: RileyHawk
Lol yes it's all Trumps fault! Lol
Nothing Biden has done (yet) has caused this.

But it's a warning that we really need to pay for what he's proposing.

Needless to say, the WSJ doesn't want taxes on the wealthy to go up, so you should probably see this article as part of a campaign to make sure Republican elites aren't touched.
 
This is the direct result of post-pandemic reopening of the economy and the associated pent up demand. Are you suggesting that the Biden administration should pump the breaks on reopening?
I suggest that so long as the Biden administration and the Democrats pump trillions in deficits per annum we’ll enjoy diminished purchasing power of the dollar.
The difference is the ‘tax’ extracted by inflating the currency to pay for government spending instead of taxing the necessary funds from the economy.
 
Lol yes it's all Trumps fault! Lol

Will this actually happen, though? I imagine that consumer demand must have skyrocketed after WWII. Did the economy see runaway inflation then? Certainly the pandemic can't have been the only time we have seen huge demand. It seems like we may have ebb and flows as we recover, but sustained inflation seems unlikely.

As the Democrats say, elections have consequences, except I voted for this consequence.

Inflation was worse under Trump in 2018...

2021* 2.26%
2020 1.25%
2019 1.81%
2018 2.44%

And while Joe was VP?...

"Inflation (measured by CPI-All Urban Consumers, All Items) fell to a historically low level during [the Obama] administration, averaging 1.4% from Q2 2009 to Q4 2016, well below the 3.0% average from Q1 1989 to Q4 2008. Interest rates also fell and remained very low."

The projected inflation modestly peaks at 2023 before dropping in 2024...

2026* 2.25%
2025* 2.37%
2024* 2.45%
2023* 2.5%
2022* 2.4%
2021* 2.26%

FRED Graph | FRED | St. Louis Fed
Graph and download economic data for from 1947-01-01 to 2021-04-29 about 10-year, maturity, Treasury, interest rate, interest, rate, USA, average, headline figure, urban, all items, consumer, CPI, inflation, price index, price, and indexes.
fred.stlouisfed.org
 
Last edited:
Last year? Wait. Does that mean it's Trump's fault?
Trump, Pelosi and Schumer conspired to eliminate the debt limit until this summer back in 2017.
Since doing so they authorized trillions in new monetary creation.
So yes, Trump, Pelosi, Schumer, and with his most recent endorsements and signing, Biden have all taken part in the debt orgy that is reducing the value of our money.
 
I suggest that so long as the Biden administration and the Democrats pump trillions in deficits per annum we’ll enjoy diminished purchasing power of the dollar.
The difference is the ‘tax’ extracted by inflating the currency to pay for government spending instead of taxing the necessary funds from the economy.
I admittedly haven't studied this in great detail, but doesn't the Biden infrastructure plan include a tax increase to offset the spending?
 
Kellogg Co., maker of Frosted Flakes, Cheez-Its and Pringles, said Thursday that higher costs for ingredients, labor and shipping are pushing it and other food makers to raise prices. “We haven’t seen this type of inflation in many, many years,” Chief Executive Officer Steve Cahillane said.
Off on a tangent alert: **** the cereal companies. They price manipulate on a major scale screwing both the farmer and the consumer.
 
So you can’t argue the statement. Just assume it’s a right wing talking point being fed to them. BAU on HROT.

Sure I can. The statement is based on a month of jobs data and they are leaping to the conclusion based on their confirmation bias. The conservative media tells them what they want to hear about it which reinforces their opinions and then you hear them all saying the same thing. BAU...
 
Sure I can. The statement is based on a month of jobs data and they are leaping to the conclusion based on their confirmation bias. The conservative media tells them what they want to hear about it which reinforces their opinions and then you hear them all saying the same thing. BAU...

Lets ignore the statement about Biden paying people to stay at home, the rest of his statement is true.

There is a HUGE labor shortage right now, people are not going to work, people are not applying for jobs, people are not coming BACK to work.

This is going to have huge consequences this summer, we are already seeing it.
 
Inflation was worse under Trump in 2018...

2021* 2.26%
2020 1.25%
2019 1.81%
2018 2.44%

And while Joe was VP...

"Inflation (measured by CPI-All Urban Consumers, All Items) fell to a historically low level during [the Obama] administration, averaging 1.4% from Q2 2009 to Q4 2016, well below the 3.0% average from Q1 1989 to Q4 2008. Interest rates also fell and remained very low."

The projected inflation modestly peaks at 2023 before dropping in 2024...

2026* 2.25%
2025* 2.37%
2024* 2.45%
2023* 2.5%
2022* 2.4%
2021* 2.26%

FRED Graph | FRED | St. Louis Fed
Graph and download economic data for from 1947-01-01 to 2021-04-29 about 10-year, maturity, Treasury, interest rate, interest, rate, USA, average, headline figure, urban, all items, consumer, CPI, inflation, price index, price, and indexes.
fred.stlouisfed.org
This is correct. People that keep pushing the narrative of hyperinflation do not look at the historical graphs and what the Fed has been saying. Fed is keeping inflation in check around 2% annually saying that there might be some spikes but for the next decade it will be around 2%.
 
  • Like
Reactions: RileyHawk
It's going up for sure but some of the reasons behind it are for good reasons vs economic collapse. You have a super hot economy with pent up demand and labor shortages creating entry level wages increasing and more dollars to spend, Companies are having to bump up but salaries and that is creating more spending too. Heck 19 year old is making 12 an hour at her part time job and filling our mail box with crap ordered online! I also feel like prices were fairly stagnant in many areas and catching back up to where they were in 2008 before the great recession, which created stagnant wages too.
 
It's going up for sure but some of the reasons behind it are for good reasons vs economic collapse. You have a super hot economy with pent up demand and labor shortages creating entry level wages increasing and more dollars to spend, Companies are having to bump up but salaries and that is creating more spending too. Heck 19 year old is making 12 an hour at her part time job and filling our mail box with crap ordered online! I also feel like prices were fairly stagnant in many areas and catching back up to where they were in 2008 before the great recession, which created stagnant wages too.
Stagnant wages have been around since the 70s
 
Nothing Biden has done (yet) has caused this.

But it's a warning that we really need to pay for what he's proposing.
Incorrect.
He has joined the cause.
He has already signed trillions in new deficit spending since taking office. His proposals are trillions more in spending with a proposal to raise a few hundred billion in taxes.
 
  • Like
Reactions: Finance85
Lets ignore the statement about Biden paying people to stay at home, the rest of his statement is true.

There is a HUGE labor shortage right now, people are not going to work, people are not applying for jobs, people are not coming BACK to work.

This is going to have huge consequences this summer, we are already seeing it.

I agree that there is a labor shortage observed on a month of jobs data. I also think it will rebound and disagree with the belief that "socialism" is causing the issue.
 
I admittedly haven't studied this in great detail, but doesn't the Biden infrastructure plan include a tax increase to offset the spending?

Yes. However, they will have to print\ borrow the money up front and then the increased taxes will pay for it over the next 15 years.
 
Sure I can. The statement is based on a month of jobs data and they are leaping to the conclusion based on their confirmation bias. The conservative media tells them what they want to hear about it which reinforces their opinions and then you hear them all saying the same thing. BAU...
So why do you think people aren’t returning to work? Plenty of jobs out there.

It also works both ways. The left wing media has their talking points too, which are echoed all across social media and HROT.
 
Agree. More consumer spending power in the lower and middle class would be a good thing.
No doubt the individual will enjoy more spending power, but as the increased real consumption can only come at the expense of reduced real savings we’ll see less investment in increasing productivity and an otherwise poorer future for society on net than would have been enjoyed.
Inflation was worse under Trump in 2018...

2021* 2.26%
2020 1.25%
2019 1.81%
2018 2.44%

And while Joe was VP...

"Inflation (measured by CPI-All Urban Consumers, All Items) fell to a historically low level during [the Obama] administration, averaging 1.4% from Q2 2009 to Q4 2016, well below the 3.0% average from Q1 1989 to Q4 2008. Interest rates also fell and remained very low."

The projected inflation modestly peaks at 2023 before dropping in 2024...

2026* 2.25%
2025* 2.37%
2024* 2.45%
2023* 2.5%
2022* 2.4%
2021* 2.26%

FRED Graph | FRED | St. Louis Fed
Graph and download economic data for from 1947-01-01 to 2021-04-29 about 10-year, maturity, Treasury, interest rate, interest, rate, USA, average, headline figure, urban, all items, consumer, CPI, inflation, price index, price, and indexes.
fred.stlouisfed.org
CPI and inflation are not the same thing.
You should read up on how CPI is calculated (imputed, really). Start with left wing sources you’ll trust like Slate.
 
Last year? Wait. Does that mean it's Trump's fault?

It’s just as much trumps fault as it is Biden’s. Anyone blaming this on one side is a damn fool. I said inflation was likely going to be an issue last year when the first stimulus was released. Giving millions of people thousands of dollars each when they had no place to go then just continuing to print money on top of that for the next 14 months, and you have a recipe for an inflation disaster. Savings rate in America skyrocketed to about 35% while those first checks went out.
 
I agree that there is a labor shortage observed on a month of jobs data. I also think it will rebound and disagree with the belief that "socialism" is causing the issue.

This has been going on longer than a month
Sure, it will rebound, but when?

Things are bad, right now
 
  • Like
Reactions: Gimmered
ADVERTISEMENT
ADVERTISEMENT