Little Inflation Relief in Sight for California Shoppers as Meat, Other Food Costs Rise

Forget about ground chuck at $1.99 a pound for a while. Or $2.99 a pound, for that matter.

Ground beef is currently $3.47 per pound at Albertsons, which has locations and subsidiaries across California, with other options at $5.99 per pound for online shoppers.

There’s little relief in sight.

Increases in the cost of living continue to hit levels unseen in 40 years — the latest reading Wednesday was a 8.3% increase in the last 12 months.

Food prices are going up even faster. They’ve increased 9.4% over the last year.

Nate Rose, senior director of communications for the California Grocers Association, told The Bee that grocery store inflation is expected to continue through the rest of the year. But what prices will look like month to month for different food items at your grocery store is hard to predict.

“Grocery stores are doing everything they can to mitigate this inflation for their shoppers,” Rose said. Considering how competitive the industry is, he said, raising prices will be the last thing they want to do.

He said stores are trying to keep prices down for fresh goods, such as milk, eggs and meat, compared to what they could be with inflation, by analyzing price sensitivity, which is the degree at which prices change a customer’s purchasing decisions.

In combination with food price inflation and food insecurity as a result of the COVID-19 pandemic, people across California are still seeking resources from food banks, said Becky Silva, government relations director at the California Association of Food Banks.

“A lot of our food banks are still reporting that they’re seeing one and a half to three times the number of people coming to their distribution sites than before the pandemic,” Silva said.

With inflation prices at the supermarket, food banks are having trouble stocking their sites.

“A lot of food banks have told us that they’re paying, sometimes, even double what they used to pay for a dozen eggs,” Silva said, adding that some sites have used a disproportionate share of their annual funding for food purchases in just the first few months of the year.

CAN FOOD PRICES BE LOWERED?

There’s just no easy way to bring down food prices.

“The forces driving overall inflation are having an impact on food,” said Joseph Glauber, senior research fellow at the International Food Policy Research Institute, as the rising costs of energy, labor and other items help push food prices higher.

Click here to read the full article in the Modesto Bee

US Inflation Jumped 8.5% In Past Year, Highest Since 1981

WASHINGTON (AP) — Inflation soared over the past year at its fastest pace in more than 40 years, with costs for food, gasoline, housing and other necessities squeezing American consumers and wiping out the pay raises that many people have received.

The Labor Department said Tuesday that its consumer price index jumped 8.5% in March from 12 months earlier, the sharpest year-over-year increase since 1981. Prices have been driven up by bottlenecked supply chains, robust consumer demand and disruptions to global food and energy markets worsened by Russia’s war against Ukraine. From February to March, inflation rose 1.2%, the biggest month-to-month jump since 2005. Gasoline prices drove more than half that increase.

Across the economy, the year-over-year price spikes were widespread. Gasoline prices rocketed 48% in the past 12 months. Used car prices have soared 35%, though they actually fell in February and March. Bedroom furniture is up 14.7%, men’s suits and coats 14.5%. Grocery prices have jumped 10%, including 18% increases for both bacon and oranges.

Investors focused on a bright spot in the report and sent stock prices up: So-called core inflation, which excludes volatile food and energy prices, rose just 0.3% from February to March, the smallest monthly rise since September. Over the past year, though, core prices are up 6.5%, the most since 1982.

“The inflation fire is still out of control,” said Christopher Rupkey, chief economist at the research firm FWDBONDS LLC.

The March inflation numbers were the first to fully capture the surge in gasoline prices that followed Russia’s invasion of Ukraine on Feb. 24. Moscow’s attacks have triggered far-reaching Western sanctions against the Russian economy and disrupted food and energy markets. According to AAA, the average price of a gallon of gasoline — $4.10 — is up 43% from a year ago, though it’s dipped in the past couple of weeks.

The acceleration of inflation has occurred against the backdrop of a booming job market and a solid overall economy. In March, employers adding a robust 431,000 jobs — the 11th straight month in which they’ve added at least 400,000. For 2021, they added 6.7 million jobs, the most in any year on record. In addition, job openings are near record highs, layoffs are at their lowest point since 1968 and the unemployment rate is just above a half-century low.

The escalation of energy prices, a potential threat to the economy’s long-term durability, has led to higher transportation costs for the shipment of goods across the economy, which, in turn, has contributed to higher prices for consumers. The squeeze is being felt particularly hard at the gas pump.

“That’s an extra dollar per gallon that I’m paying to get into the city to work,” Jason Emerson of Oakland, California, said as he loaded groceries into his car. “And then, you know, we have the tolls that just went up this past year a dollar. My eggs are a dollar more as well. So everything’s going up at least a dollar, which, you know, adds up.’

The latest inflation numbers solidify expectations that the Federal Reserve will raise interest rates aggressively in the coming months to try to slow borrowing and spending and tame inflation.

Kathy Bostjancic, an economist at Oxford Economics, said she expects year-over-year inflation to hit 9% in May and then begin “a slow descent.” Some other economists, too, suggest that inflation is at or near its peak. With federal stimulus aid having expired, consumer demand could flag as wages fall behind inflation, households drain more of their savings and the Fed sharply raises rates, all of which could combine to slow inflation.

But that could take time. Robust spending, steady pay raises and chronic supply shortages are still fueling inflation. In addition, housing costs, which make up about a third of the consumer price index, have escalated, a trend that seems unlikely to reverse anytime soon.

Economists note that as the economy has emerged from the depths of the pandemic, consumers have been gradually broadening their spending beyond goods to include more services. A result is that high inflation, which at first had reflected mainly a shortage of goods — from cars and furniture to electronics and sports equipment — has been emerging in services, too, like travel, health care and entertainment. Airline fares, for instance, have soared an average of nearly 24% in the past 12 months. The average cost of a hotel room is up 29%

The expected fast pace of the Fed’s rate increases will make loans sharply more expensive for consumers and businesses. Mortgage rates, in particular, though not directly influenced by the Fed, have rocketed higher in recent weeks, making home buying costlier. Many economists say they worry that the Fed has waited too long to begin raising rates and might end up acting so aggressively as to trigger a recession.

The American public’s expectation for inflation over the next 12 months has reached its highest point — 6.6% — in a survey the Federal Reserve Bank of New York has conducted since 2013. Once public expectations for inflation rise, they can be self-fulfilling: Workers typically demand higher pay to offset their expectations for price increases. Businesses, in turn, raise prices to cover their higher labor costs. This can set off a wage-price spiral, something the nation last endured in the late 1960s and 1970s.

Click here to read the full article at the Mercury News

Inflation Is a Tax On Us All

Pinned on my office wall is a Zimbabwe $10,000,000,000,000 note. (That’s 10 trillion for those of you tired of counting zeroes). The currency is real, although Zimbabwe’s default currency is now the U.S. dollar. The central bank of Zimbabwe issued these $10T notes during the last days of hyperinflation in 2009, and they barely paid for a loaf of bread.

Ironically, you can now purchase one of these bills for about $27 U.S. dollars because they serve as collectors’ items or, more importantly, as a physical representation of the evils of inflation. Every economics professor in America should own one to show to their students on the first day of Econ 101.

Milton Friedman explained that inflation is always “a monetary phenomenon in the sense that it is and can be produced only by more rapid increase in the quantity of money than in output.”

Inflation hits everyone, but especially the middle class and those on fixed incomes. Inflation is a threat to the middle class because price increases reduce purchasing power so that the things that the middle class could previously afford are now out of reach. This pushes the lower rungs of the middle class out of the picture.

The disproportionate impact of inflation on the middle class relative to the wealthy may seem counterintuitive because the inflation rate — projected now at over 6% — is the same for everyone. But while all suffer the same rate of inflation, those with lower incomes tend to have lesser means of adapting to the increases in consumer prices. The suggestion from Biden’s White House chief of staff Ron Klain that inflation is a “high-class” problem is insulting.

Click here to read the full article at the Whittier Daily News

Kamala Harris Struggles Through Question On Inflation During CBS Interview

Vice President Kamala Harris struggled to give a coherent answer when asked about the economy and inflation during a Sunday interview on CBS.

Harris appeared on “Face the Nation” when host Margaret Brennan asked her on the issues of inflation going into the “third year” of a pandemic.

The question referred to a previous statement pushed by White House press secretary Jen Psaki that insisted inflation was only “transitory” and should go down within the next year.

Since then economists have admitted inflation has only gotten worse as the year ends with many predicting the increased spending proposals from President Biden could make the problem worse. 

Harris did not provide a clear answer to the question of combating inflation. She appeared to stumble on describing the process before pivoting to support for Biden’s Build Back Better plan, which has been delayed because Sen. Joe Manchin, D-W.Va., announced his opposition to the legislation. 

“We have to address the fact that we have got to deal with the fact that folks are paying for gas, paying for groceries, and are — need solutions to it. So let’s talk about that,” Harris said. “Short-term solution includes what we need to do around the supply chain, right? So, we went to the ports of Los Angeles, Long Beach, Savannah, Georgia, and said, ‘hey, guys, no more five days a week, eight hours a day; 24/7, let’s move the products because people need their product – they need what they need.’ We’re dealing with it in terms of the long term. And that’s about what we need to do to pass Build Back Better. It strengthens our economy.”

Click here to read the full article at FoxNews

President Biden’s Job Approval Sinking On Inflation, Crime and COVID: POLL

President Joe Biden is facing significant skepticism from the American public, with his job approval rating lagging across a range of major issues, including new lows for his handling of crime, gun violence and the economic recovery, a new ABC/Ipsos poll finds.

As the White House confronts rising and widespread concern about inflation, Americans are especially negative on how the Biden administration is managing this issue.

More than two-thirds of Americans (69%) disapprove of how Biden is handling inflation (only 28% approve) while more than half (57%) disapprove of his handling of the economic recovery. Partisan splits for inflation show expected negativity in Republican views (94% disapproving), but the survey also reveals weaknesses from Biden’s own party with only a slim majority of Democrats (54%) approving. Biden’s orbit is also hemorrhaging independent voters, with 71% disapproving of his handling of inflation.

MORE: Social spending plan will help ease pain from record-breaking inflation: White House

he ABC/Ipsos poll, which was conducted by Ipsos in partnership with ABC News using Ipsos’ KnowledgePanel, reveals these rocky ratings for Biden at a time when the bulk of Americans name inflation and paying everyday bills as a top concern. Concern about inflation has eclipsed worry about the coronavirus pandemic, according to recent polls from Monmouth and AP-NORC, as Republicans continuously spotlight rising prices at the gas pump and the grocery store as a key issue for the upcoming midterm elections — likely to be a referendum on Biden’s performance.

These low job assessments in areas of high public concern have led to a new low in Biden’s overall approval rating, measured by FiveThirtyEight at 43%.

Click here to read the full article at Yahoo! News