Consumer Prices Up; Food, Energy Skyrocket

Energy Costs Shoot Up 17 Percent Since Last Year, Bread And Milk Prices Soar

(AP)  Consumer prices pushed higher last month as increases in energy, food and airline tickets overwhelmed the biggest drop in clothing prices in nearly a decade.

The Labor Department reported Wednesday that consumer prices rose 0.3 percent in March after being unchanged in February.

Core inflation, which excludes food and energy, posted a 0.2 percent rise last month. Both the overall increase and the rise in core prices were in line with analysts' expectations.

Over the past 12 months, inflation is up by 4 percent, reflecting relentless gains in energy costs, which are up 17 percent over that period, and food prices, which are up 4.4 percent.

For individual food items, the gains are even more stark, with the price of bread up 14.7 percent over the past year and milk prices up 13.3 percent over the same period.

In other economic news, construction of new homes and apartments plunged in March to the lowest level in 17 years while industrial production posted a small rebound.

Housing construction dropped by 11.9 percent to a seasonally adjusted annual rate of 947,000 units, the Commerce Department reported, a much bigger decline than economists had been forecasting. Building permits also fell in March, signaling more problems ahead for the beleaguered housing industry.

The Federal Reserve said that industrial output rose by 0.3 percent in March, better than the 0.1 percent decline that analysts had expected. Industrial production had fallen a sharp 0.7 percent in February.

The March gain was led by a 1.9 percent surge in output at the nation's utilities and a 0.9 percent rise in mining production. Manufacturing output remained under stress, managing a tiny 0.1 percent rise after a 0.5 percent drop in February.

The continued price increases in basic items such as gasoline and food have left Americans feeling squeezed, especially at a time when the weak economy is causing rising job layoffs and an unemployment rate that jumped to 5.1 percent in March.

While many economists believe the country has dropped into a recession, the first since 2001, President Bush insists the economy will rebound this summer as 130 million households start spending their economic stimulus checks.

The Federal Reserve has been aggressively cutting interest rates and also shoveling billions of dollars into the banking system in an effort to combat a severe credit crisis. Many economists believe the Fed will cut rates again when policymakers meet at the end of this month.

A separate report showed that higher prices and rising unemployment resulted in falling wages in March. After adjusting for inflation, average weekly earnings for nonsupervisory employees dropped 1 percent last month, compared to the same period a year ago. It was the sixth straight month that inflation-adjusted wages were down.

Democrats, who contend that Americans are getting squeezed between rising energy and food costs and falling home prices and stagnant wages, are pointing to the various economic problems as a reason to elect a Democratic president in November. Mr. Bush's approval ratings on his handling of the economy have fallen to a record low for his presidency.

The Consumer Price Index report showed that energy costs jumped 1.9 percent in March, with gasoline prices up 1.3 percent and natural gas prices soaring by an even larger 4.6 percent.

Analysts believe that energy prices will keep rising in the months ahead, reflecting the jump in crude oil costs, which have hit record levels above $114 per barrel.

Food costs rose by 0.2 percent in March, with beef prices up 0.6 percent and vegetable costs up 2 percent.

Airline tickets, reflecting the surge in fuel costs, shot up by 3 percent last month, the biggest jump in six years, while clothing costs fell by 1.3 percent, the biggest one-month drop since September 1998.

[olebd]

Oh great Ross Perot. Where art thou?

[ora734]

All this talk don''''t mean squat, email, call, write, congress demand they change the rules in the futures market to if you speculate with a necessity commodity that you have to take possession of the comm. for the very least 24-48 hrs. this will stop these parasites who are destroying this economy. I understand they are bought and paid for, but if enough of us yell loud enough they will get something done. If these parasites have to rent a tanker to take possession they will think long and hard about their actions.

Think about this the truckers are paying 4.& a gal. they get 3-5 mpg, when they have to pay 7.$ a gal how much you think it will cost for a piece of bubble gum. People really don%u2019t stop and think about what%u2019s coming, but it is coming and my wages will not keep up now let alone when we have to pay for 115.$ gas, right now we are paying on oil purchased that was purchased for 80.$.

[mcvet]

Yes and no.

There is no end to "this madness", but there will most definitely be, in the very near future...

...an end.


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Posted by NAUcoming4U at 04:59 AM : Apr 17, 2008
+ report abuse

Oh I don''t think so. American''s are going to go into the voting booth in RECORD Numbers this November and elect a bright young senator from Illinois AGAIN. He has the ablity to win withoug hate and division. He can bring us together and make us dream again. Oh No! It''s time to turn the page that''s all. Sieg Heil Bush

[mcvet]

Remember the victory gardens of WW-2 ?
Forget the worthless lawn and put in a vegetable garden. WE are not living sustainable life practices.
I lived during the Great ??? Depression..
I would be pleased to help with knowledge of survival. Great-grandfather John.


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Posted by G-GFATHER at 06:30 AM : Apr 17, 2008
+ report abuse

LOL YOU mean to say Trickle Down hasn''t worked, YET again, and we need to prepare for the worst? You mean to say that Prosperity isn''t just around the Corner? Oh! Better watch out! If Darth and the Gestapo hear about you, you are in big trouble. Sieg Heil Bush

[g-gfather]

Remember the victory gardens of WW-2 ?
Forget the worthless lawn and put in a vegetable garden. WE are not living sustainable life practices.
I lived during the Great ??? Depression..
I would be pleased to help with knowledge of survival. Great-grandfather John.

[slim1h2o]

Should have said in my post below,,,,

"And the next Prez. will be blamed for the depression,, etc. etc,,,,

[slim1h2o]

...an end.

Posted by NAUcoming4U at 04:59 AM : Apr 17, 2008

There will be no jobs,, saving will be wiped out, right along with our retirement funds.

Like mcv57 said,,I''ve bee saying for some time now (since gas prices jumped the 1st time) we will be in a depression,,very soon now. And the prez. will be blamed for it, the American people have a very short memory at times.

[naucoming4u]

Is there no end to this madness?

Posted by rudy654 at 12:50 AM : Apr 17, 2008
..........

Yes and no.

There is no end to "this madness", but there will most definitely be, in the very near future...

...an end.

[rudy654-2009]

And it is only going to get worse, folks. Right now they are going to give millions away to corporate farmers in subsidies with your tax money. This is going to leave corporate farming a nice penny especially with the high price of corn that they are getting on the world market, plunging billions into starvation. Is there no end to this madness?

[element51]

cattlekate...I think you have something there. It seems that everytime we go to the grocery store we spend more money and take home less items. I think the government is lying because our social security is tied to inflation. Last year I got 11.00 more per month. I would swear that prices are going up more than that. As far as savings go, we saved all our lives preparing for retirement and we have about 250k to draw interest on. The return on our savings is now a little over 2%. We might do better with riskier investments but what happens if we back the wrong horse. Lots of folks had Enron stock and thought they were set for life. Oh well, we never thought we would retire rich. Any way, good information and I think you nailed it.