NOTE: Karen’s got a great point in the comments about grain-related products. She’s spot on, taking away a little of my thunder in fact. Glad I have friends who are smarter than me! ;)
This week, the price of the store brand wheat bread, which had remained the same for at least the past three years, jumped from $0.89 a loaf to $1.12.
What happens on Wall Street does effect “Main Street”.
People at the grocery store were complaining that “the prices are going up.”
I replied, “No, the value of the dollar is falling.”
“Prices going up” is merely a euphemism. Inflation by any other name is still inflation.
But yet the prices of the raw materials for FOOD in particular, especially grains, have gone up relative to other things. We had been acustomed to extremely inexpensive food supply comparied to even recent generations of americans – the average family had to spend a higher percentage of their household income to buy groceries in other decades. The 90s and 00s had seen very cheap food prices.
Ethanol has a lot to do with this, as farmers switched to growing more corn (over wheat, soy and other field staples) and the corn itself is no longer dirt cheap for animal feed, additives into processed foods, sweetener, etc.
Unless the price of EVERYTHING is going up, it might have less to do with inflation that just the price of food really going up!
http://www.economist.com/opinion/displaystory.cfm?story_id=10252015
http://data.bls.gov/PDQ/outside.jsp?survey=ap
http://www.bls.gov/data/inflation_calculator.htm