[permaculture] NEW YORK (CNNMoney.com) -- Double-trouble for consumers - Feb. 27, 2008
Lawrence F. London, Jr.
lflj at intrex.net
Thu Feb 28 07:33:23 EST 2008
feed://rss.cnn.com/rss/money_news_economy.rss By Tami Luhby, CNNMoney.com senior writer February 28 2008: 5:40 AM EST
NEW YORK (CNNMoney.com) -- As anyone who's been to the gas station or supermarket lately knows, the prices of fuel and
food are on the rise. And you haven't seen anything yet, some experts say. But with crude oil prices setting a new
trading high of $102.08 a barrel on Wednesday, it's only a matter of time before drivers see it hit another record at
the pump. The high cost of gas is helping fuel a surge in food prices. Higher transportation expenses, along with
growing demand for agricultural exports from the United States and increasing need for corn-based ethanol for gas
supplies, has sent commodity costs soaring. Last week, the federal government reported that the Consumer Price Index
rose a greater-than-expected 0.4% in January and 4.3% over the past 12 months, mainly because of higher food and energy
costs. Food and beverages jumped 4.8% for the year and transportation soared 9.4%. Though prices have been climbing for
the last few years, consumers didn't feel it as much in the past because their home values were soaring. "But now, with
housing prices having gone down, credit becoming tighter and prices of necessities like food and energy going up
sharply, it's created quite a squeeze on consumers' disposable income," said Maria Fiorini Ramirez, head of economic
consulting firm MFR Inc. Economists fear a continued slowdown in consumer spending will further weaken the economy.
The Federal Reserve's rate cuts won't lessen this inflation, said food price expert John Norris, managing director at
Oakworth Capital Bank. As long as the dollar remains weak, the global demand for American exports will remain high.
"Consumers should build into their budgets continued increases," Norris said.
More information about the permaculture