According to the Christian Science Monitor, Inflation hits the family dinner table. There are some who believe that inflation has been much higher than CPI numbers would indicate for some years now. There are a number of techniques that the BLS uses to remove accelerating prices from their index computation (see my previous BLOG on this issue). This manipulation is becoming harder to do, when:
Eggs: up 5.2 percent so far this year. Butter for your bread: up 62 percent. A glass of 2 percent milk to wash it all down: It may rise as much as 50 cents a gallon next month. Time to head to work: filling up the gas tank now costs 30 cents a gallon more since January.
Prices increases are affecting businesses as well:
It could be worse. Many businesses are absorbing the price hikes in order to keep their customers. Take Il Forno, a restaurant on Manhattan’s Upper West Side. Joe and Mike Chaghlil sell ham and egg sandwiches for $2.50. They used to make good money on them. But, in the past year, the price of the eggs went from $20 a case to $40, while the price of ham climbed from 42 cents a pound to 56. Even the bread became more expensive. “We’re probably losing money on each sandwich,” says Joe Chaghlil, who has not taken a salary in eight months to help keep the restaurant in business. “But the customers won’t pay more.”
Businesses cannot lose money forever, though. Eventually they will either go broke or have to pass on their costs.
Yet other stores are starting to pass on part of their higher costs. That’s the case at Schaller & Weber, a deli on Manhattan’s Upper East Side. “The chickens have gone up like crazy, the pork prices are going up, the bacon - bacon is through the roof now,” says Chris Cunningham, the manager who notes the store passes on about 75 percent of the the higher costs to consumers.
