Rising Food, Gas Prices Lift U.S. Consumer Inflation

Americans are paying more for food and gas, a trend that could slow economic growth in the months ahead.

The Consumer Price Index rose 0.5 percent in March, the Labor Department said Friday. That matched February's increase, the largest since the recession ended in June 2009. In the past 12 months, the index has increased 2.7 percent, the biggest rise since December 2009.

Excluding the volatile food and gas categories, the so-called core index rose 0.1 percent and it is up only 1.2 percent in the past year.

Consumers are spending more, but the steep rise in food and gas prices could limit their ability to purchase discretionary goods and services. Consumer spending makes up 70 percent of economic activity.

Rising inflation has caused many analysts to reduce their estimates for economic growth in the January-March quarter from roughly 3 percent or higher to as low as 1.5 percent.

Gasoline jumped 5.6 percent last month and has risen nearly 28 percent in the past year. Consumers paid an average price of $3.81 a gallon nationwide on Friday according to the travel group AAA.

Food prices rose 0.8 percent last month, the largest increase in almost three years. Prices for fruits and vegetables, dairy products, chicken and beef all increased. Coffee costs rose 3.5 percent.

Separately, the Federal Reserve said U.S. factories produced more consumer goods, business equipment and raw materials in March, boosting manufacturing activity for the ninth straight month. Overall industrial production increased 0.8 percent.

Factory production, the largest single segment of industrial production, increased 0.7 percent last month. Manufacturing has been a key driver of economic growth since the recession ended. That continued last month, even with supply chain disruptions stemming from the crisis in Japan.

Manufacturers, food processors and other producers are facing higher costs for oil, grains and other commodities. But only some of those increases are reaching the consumer. Many retailers are reluctant to pass on the higher prices for fear of losing price-conscious customers.

Consumers have seen wages and salaries stagnate in the past year, limiting their ability to pay more for many goods. According to a separate government report Friday, average hourly earnings for all employees, adjusted for inflation, dropped 1 percent in the past 12 months.

Stagnant wages are a big reason that most Federal Reserve policymakers say the spike in gas and food will have only a modest and temporary impact on inflation.

"Nothing here to change the Fed's view that the surge in commodity prices can be ignored as long as it doesn't lead to second-round effects in wages and core inflation," said Paul Ashworth, chief U.S. economist at Capital Economics.

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  • by Anonymous on Apr 19, 2011 at 04:43 PM
    I'm amazed he's running for reelection. Sadly theres plenty of welfare parasites to vote for him so he'll probably succeed. If you rob Peter to pay Paul you can always count on Pauls approval!
  • by Anonymous on Apr 19, 2011 at 08:14 AM
    Snake Oil - Sheep pull the roots up like sheep. Not goats. Goats graze by leaving leaves. Check the biblical examples about people being sheep, which means we are not efficient and self-sufficient... like goats can be.
    • reply
      by Obama Snake Oil co on Apr 19, 2011 at 01:38 PM in reply to
      The reference to sheep is they follow the herd no matter what and do as they say do. The reference to eating the grass refers to the fact they think the government should take care of them as they are not capable of doing it on their own.
  • by Obama Snake Oil co Location: Washington on Apr 17, 2011 at 04:51 AM
    Lavon, will you tell us why you voted for the worst president in the history of this nation?
    • reply
      by BLAHammed on Apr 17, 2011 at 06:46 AM in reply to Obama Snake Oil co
      I doubt race had anything to do with it.HA!
      • reply
        by Anonymous on Apr 17, 2011 at 08:44 AM in reply to BLAHammed
        But it has NOW! Just read some of these comments. http://www.huffingtonpost.com/2011/04/16/marilyn-davenports-racist_n_850063.html
        • reply
          by Obama Snake Oil co on Apr 18, 2011 at 04:19 PM in reply to
          You a Soros supporter? You know he gave money to go after republicans anyway they could? Sheep, never leave them in the field too long...they pull the grass up like goats and will starve without intervention. YOU a sheep?
    • reply
      by to osoc on Apr 17, 2011 at 08:41 AM in reply to Obama Snake Oil co
      Tell us why you voted for Bush for 2(two,count em two)terms which led to the greatest depression in US history? FYI, its hard to duck a flying shoe with that Tin Foil Hat on.
      • reply
        by abled for the cause on Apr 18, 2011 at 12:49 AM in reply to to osoc
        hey crazy talk to osoc to and help out Obama Snake. Let him know we won't feel what Bush did in until 2012. We are actually in the back end of Clinton's term. He looked real good due to "Reagonomics".
        • reply
          by Obama Snake Oil Co on Apr 18, 2011 at 12:30 PM in reply to abled for the cause
          Really? Clintons term benefited from Geingrich controlling the spending...you know, history is easily found on the net. Good luck with that theory....
  • by Michelle Location: Greenville on Apr 17, 2011 at 03:05 AM
    Friends, if this is more than irritating you now, just wait. I promise you this economy will NEVER be "fixed." Be diligently prudent and do your part and if you are trusting the right one, you will be okay.
  • by crazyhorse Location: washington on Apr 17, 2011 at 02:56 AM
    Plain and simple. The US has numerous ways to get away from fossil fuels but OPEC will lose so much money they would become bankrupt and so will the US. We are dependant on fossil fuel because funding has to go through the government and the "BIG BOYS" won't allow it. You can't have something that would change the world so fast come into effect, without doing it slowly. If any president allowed that to happen he would be considered a God.
    • reply
      by James on Apr 17, 2011 at 06:39 AM in reply to crazyhorse
      Crazy, you're crazy as a horse. There is NOTHING more effecient currently than fossil fuels... absolutely NOTHING ! Granted years from now we probably can convert but right now we CAN'T. Your electric car runs on COAL POWER, solar is way way too expensive to work. We're stuck on fossil fuel for the next 30-50 years, accept it. We need our own supply of oil for the USA, period. Drill for our own oil, here, now.
      • reply
        by crazyhorse on Apr 17, 2011 at 07:22 AM in reply to James
        i'm pretty sure you have no clue what the military already has out that don't run off coal or fossil fuel cupcake.
        • reply
          by James on Apr 17, 2011 at 09:51 AM in reply to crazyhorse
          well out with it crazy, you make a statement like that and leave it without ONE CONCRETE ITEM ? Bull. Tanks run on turbines, some ships are nuclear, most still use fuel. Let me see you run a tank or ship or airplace on solar energy. Your full of it. If you have proof of the contrary, post it.
        • reply
          by crazy horse on Apr 17, 2011 at 12:42 PM in reply to crazyhorse
          and again you still haven't read my comment correctly.
      • reply
        by crazyhorse on Apr 17, 2011 at 07:26 AM in reply to James
        and james did you even read what I said. before you call out someone's name with your opinion know what you say referring to any comment. you did not READ my comment correctly jackin' james.
        • reply
          by crazyhorse on Apr 17, 2011 at 12:40 PM in reply to crazyhorse
          i'm retired from the military after 26 yrs, and they have machines running off h20 only for almost 5 yrs, the military since the 40's have been ahead of civilian tech by almost 10-20 yrs. the computers we have today they had at the eand of the 80's and early 90's--- that is pure fact pedro---
        • reply
          by James on Apr 17, 2011 at 01:34 PM in reply to crazyhorse
          Crazy, if I remember correctly the old computers the big battleships used to aim the gun were "mechanical" computers.... yes ahead of their time, but not commercially viable to consumers. Bill Gates and Steve Jobs made the computer we know today viable... not government.
        • reply
          by Anonymous on Apr 18, 2011 at 08:00 AM in reply to crazyhorse
          Crazyhorse full of crazybull
      • reply
        by James on Apr 17, 2011 at 01:32 PM in reply to James
        Again crazy.... show me a H20 powered Humvee, or a H20 powered tank. I agree with you that the military helps develope many advanced products we use daily, but there is still NOTHING that will replace fossil fuels for the Average american driving back and forth to work, or heating their homes. Jets burn JP-4, JP-7, the space shuttle burns liquid hydrogen & liquid oxygen, ect. Please show me a economically viable consumer fuel that's available for the mass population TODAY. There are only 4 answers... oil, coal, natural gas or propane & nuclear. Oil (gas) and natrual gas/propane is very consumer friendly and most importantly... C H E A P in comparison.
        • reply
          by ready or not on Apr 17, 2011 at 11:58 PM in reply to James
          Hate to say this Jmes there are H20 tanks and generator pumps. Solar panels are the cheapest way to get electricity. Much as I hate to agree with horse cause we argue on here alot. The military has alot of tech out there no one knows of.
        • reply
          by James on Apr 18, 2011 at 06:03 AM in reply to James
          Ready or not, I priced putting solar panels on my business roof to get off Progress Energy... $ 300,000. Please tell me how a small business can afford that ? It would take 23 years for a return on investment. Solar IS NOT viable at the current time.
        • reply
          by ready or not on Apr 18, 2011 at 06:42 AM in reply to James
          james you can put solar panels in your house for 2500 a panel and easy to do yourself. where did you get that foolish estimate from lmao.....
        • reply
          by James on Apr 18, 2011 at 08:52 AM in reply to James
          Ready.... that's 5,600 sq ft of panels, enough to totally supply our energy usage. A few panels won't run a commercial business, unlike your small home. We have 12,000 sq ft to heat, cool, light.
        • reply
          by James on Apr 18, 2011 at 08:55 AM in reply to James
          Unlike the others, I'll post proof of my claims. http://www.solarpanelsonline.org/ProductDetails.asp?ProductCode=999GTS690 Here is a 8000 watt kit, $ 52,000 One A/C unit pulls 12,000 watts, we have 7 of them. You do the math if you're so smart. now lmao
  • by T Maxx Location: G-vegas on Apr 16, 2011 at 01:25 PM
    Thanks democrates and Obama which I quote I dont mind 4 bucks gas prices, now who stupid Obama,
    • reply
      by Lavon on Apr 16, 2011 at 03:59 PM in reply to T Maxx
      Give me one fact to tie the price of gas going up because of Obama
      • reply
        by BLAHammed on Apr 16, 2011 at 04:28 PM in reply to Lavon
        Give us one fact he did not say this!If oBLAHma dont care if it is $4 dollars a gallon who is to say he dont care how high it goes?laverne mangirl,you really need to get a grip and see things the way they are not the way you wish them to be.Whatever that twisted way is.
      • reply
        by BLAHammed on Apr 16, 2011 at 05:01 PM in reply to Lavon
        Give us one fact that oBLAHma did not say this!If a so called prez(pinnochioBLAHma) dont care you no OPEC dont!
      • reply
        by Anonymous on Apr 16, 2011 at 05:48 PM in reply to Lavon
        How about no drilling for 7 years?
      • reply
        by Anonymous on Apr 17, 2011 at 04:49 AM in reply to Lavon
        He stopped us from drilling for our own oil fool!
      • reply
        by abled for the cause on Apr 18, 2011 at 12:51 AM in reply to Lavon
        Yep they still havent given a fact have the Lavon. Not sticking up for "Obama your mama", though.
      • reply
        by Don't Have To on Apr 18, 2011 at 07:46 AM in reply to Lavon
        Don't have to. As many times you spouted your spendocrat BS blaming Bush for rising gas prices. Espically when you had no facts to support your claim. Your mantra was "It's Bushs fault because he was President at the time." Well it's turned and now it's obamas fault gas prices are going up because "he is president." Don't you hate it when your rhetoric comes back to bite you.
  • by Whazzup? Location: Ayden on Apr 16, 2011 at 11:49 AM
    The senior elected official with Kenyan heritage within the Executive Branch of the Federal Government signed into law his version of universal healthcare - with exceptions for his political allies - is leading the country to financial ruin. But his idea was to impose his socialist ideology on the country; leading the country was the furthest thing from his mind. There is plenty of liquid fossil fuel within our boundaries, but his liberal comtemparies will forbid the drilling of it; they would rather see the country buy the liquid fossil fuels from countries who channel the profit to groups who want to destroy us. Ah, a change you can beleive in.
    • reply
      by Anonymous on Apr 16, 2011 at 01:31 PM in reply to Whazzup?
      Where did you get your info from? I cannot confirm your claims.
      • reply
        by BLAHammed on Apr 16, 2011 at 04:09 PM in reply to
        maybe you should ask "saywha".Whazzup? told the truth.
        • reply
          by to blahammer on Apr 17, 2011 at 04:18 AM in reply to BLAHammed
          I would prefer to deal in facts not opinions or rhetoric.
  • by lee on Apr 16, 2011 at 11:36 AM
    You are right the bubble was 2008, Barney Franks and Chris Dodds got their pockets full with tax payer money and that caused the housing bubble.There should be nofighting now all parties should work together and thats what would make our country work again.God Bless The USA
    • reply
      by Fact Bringer on Apr 16, 2011 at 01:30 PM in reply to lee
      Alan Greenspan!
  • by Jim Location: KDH on Apr 16, 2011 at 11:10 AM
    Everything goes up except my pay, and I'm sure I'm not alone.
  • by no surprise Location: here on Apr 16, 2011 at 08:14 AM
    Americans KNEW this was coming!! As soon as you increase taxes on the rich, they make everyone else pay for it!!
    • reply
      by Lyman Hill on Apr 16, 2011 at 09:33 AM in reply to no surprise
      Don't forget the devaluation of the dollar! China and India are both looking at kicking the dollar out as the main world currency. When that happens...well, you ain't seen nothin' yet. And the idea of Donald Trump being president makes me shudder. Get busy in the garden and start shopping at Family Dollar.
      • reply
        by BLAHammed on Apr 16, 2011 at 01:37 PM in reply to Lyman Hill
        I agree grow a big garden but shopping at family dollar and help china out with their manipulated currency?That will solve the problem wont it.
    • reply
      by Vickie on Apr 16, 2011 at 10:05 AM in reply to no surprise
      The tax increase hasn't take effect yet, has it? Groceries have been going up for two years now.
      • reply
        by Obama Snake Oil co on Apr 16, 2011 at 02:19 PM in reply to Vickie
        Not like it is now...at least 12% I know...
      • reply
        by Anonymous on Apr 17, 2011 at 04:21 AM in reply to Vickie
        I cannot recall ever when prices actually dropped to any noticeable levels, they always increase in time.
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