Cheap Imports Not So Cheap Anymore

The U.S. middle class has been feeling battered for quite some time, but at least American consumers can count on low-priced imports from China and other Asian countries where labor and materials are cheap. Or can they?

Sorry, the answer is no. Prices of imported goods are climbing rapidly – up eight percent over the last two years, the Wall Street Journal reports. That's contributing to inflationary pressures and putting more strain on household budgets already stretched by high energy and healthcare costs and stagnant wages.

There are, as usual, several factors at work. One is that Asian labor is no longer as it once way. And, as wages rise Asian workers become more avid consumers, buying more of the goods that were once bound almost entirely for export.

Currency valuations also come into play. Chinese officials have kept their currency undervalued, making their exports cheap and contributing to massive U.S. trade deficits. Now the Chinese yuan is rising as the dollar weakens.

Not all bad

All of this is not necessarily as bad as it sounds. There's general agreement that the U.S. needs to import less and export more. A weaker dollar helps make that happen.

But that's scant comfort to U.S. consumers trying to stretch their shopping budgets.

Footwear and apparel are particularly vulnerable to the trend of rising prices on imported goods. The Journal reports that such household names as Nike, Polo, Ugg and Abercrombie & Fitch are all likely to be more expensive when fall lines are introduced.

Overall apparel prices are expected to rise 4% to 6%, trade association executives told the Journal.