Food, apparel prices rising

November 4, 2010 16:21

Many have warned that the Fed is lying about inflation. Now the reality of rising prices rears its ugly head. Ironically on the same day the Fed announces $600 billion in new purchases of U.S. IOU’s, two articles in the Wall Street Journal describe higher prices in food and apparel.

From ‘Food Sellers Grit Teeth, Raise Prices‘ at Wall Street Journal:

“Prices of staples including milk, beef, coffee, cocoa and sugar have risen sharply in recent months. And food makers and retailers including McDonald’s Corp., Kellogg Co. and Kroger Co. have begun to signal that they’ll try to make consumers shoulder more of the higher costs for ingredients.”

“But in the last two months, Mr. Tabatchnick says his costs for vegetable oils, sugar, dried beans and other ingredients jumped 20% to 30%. “It’s going to reduce the [profit] margin dramatically on the product,” he says. “We’re stuck.””

And this from ‘Unable to Stretch Further, Apparel Makers Raise Prices‘ at The Wall Street Journal:

“Shoppers will have to pay more for clothing next year as skyrocketing cotton prices force companies to take their chances with price increases even as consumer demand remains sluggish.”

“But with cotton hitting historic highs and labor costs in China climbing, “this is just part of where we are headed as an industry,” Mr. Card said. Consumers can expect to see 5% to 10% increases on selected products, with commodity items rising at the lower end of that range and fashion at the higher end.”

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