Complain about a product or service

Consumer Prices Rise More Than Forecast

Costs of living continue to increase even as economy stagnates

By Mark Huffman
ConsumerAffairs.com

March 18, 2009

Personal Finance • Consumer Prices Edge Up In October • Dodd Bill Addresses 'Too Big To Fail' • Study: Four Types Of Consumers Emerging From Recession • States Worry About Federal Preemption In Consumer Bill • Job Cuts Continue To Fall In October • Consumer Confidence Dips in October, But Rises for Holiday Season • Is The Recession Over? • Economy to Affect Two-Thirds of Families This Holiday • Fed Sees Improvement In US Economy • Consumer Prices Rise Slightly In September • Attorneys General Back Consumer Financial Protection Agency • Gold And Stocks: Are Both Dangerously High? • Study: Americans Crave Better Financial Knowledge • Hiring Begins To Emerge Even As Companies Shed Jobs • Economists Say Worst Of Recession Over • Economy May Force Early Retirements • White-Collar Workers Hit Hard By Recession • Fed Sees Recovering Economy • Six-In-Ten Workers Live Paycheck To Paycheck, Survey Finds • Seven Steps To Saving Money • Survey Suggests Improvement In Jobs Outlook • Stocks Still Outperform, Researchers Claim • Employment Prospects Brighten For Jobless Americans • Job Cuts Rise Following 15-Month Low • Little Sign of Inflation on the Horizon • CFA Applauds Plan to Strengthen Key Investor Protections • Consumers Fall Further Behind On Loans --- • More Personal Finance News

While consumers are coping with a tanking economy, they may also have to deal with a rising cost of living.

The U.S. Labor Department reports the Consumer Price Index, a measure of goods and services at the retail level, rose 0.4 percent in February, adding to a 0.3 percent rise in February.

Much of the increase can be attributed to gasoline prices, which have been climbing again since the beginning to 2009. The so-called "core" rate of inflation, which excludes food and energy costs — was up a more modest 0.2 percent.

So far this year the nation's annualized inflation rate is running just under two percent, well within the Federal Reserve's projections. The Fed's larger concern, at this point in the recession, is that prices actually might fall, setting off a downward spiral of deflation.

Bloomberg News reported the 0.4 percent inflation rate was slightly higher than economists had expected. It says its survey of 71 economists predicted a 0.3 percent rate in February. Joel Naroff, chief economist for Naroff Economic Advisors, in Holland, Pennsylvania, says it's much too early to be worrying about inflation.

"We are in a major recession so worrying about inflation should be left to the perpetually perplexed," Naroff said. "Maybe by the fall, if the economy is showing signs of coming out of it, we might have reason to start asking whether inflation will be an issue, but not now."

Consumers paid quite a bit more for energy last month, led by an 8.3 percent increase in gasoline prices. Fuel prices rose despite falling world oil prices and U.S. refineries ran at only 80 percent of capacity, preventing an oversupply of gasoline that would drive down prices.

In good news for consumers, food prices actually declined in February, falling 0.1 percent. It was the first drop in food prices since April 2006.

Consumers who felt confidently enough to take a vacation found cheaper air fare and hotel rates in February. Some warm weather resorts, which normally are booked solid in February, found they had to slash prices in order to entice visitors.

Report Your Experience
If you've had a bad experience -- or a good one -- with a consumer product or service, we'd like to hear about it. All complaints are reviewed by class action attorneys and are considered for publication on our site. Knowledge is power! Help spread the word. File your consumer report now.

Share		Follow us on Twitter.

Back to the top |