Thursday, March 17, 2011
Higher Prices for Consumers
I have definitely noticed the rising prices recently, and this article quantifies my observation. Prices have risen 2.1% in the last year. With the higher prices for necessary items like food and fuel, consumers and producers alike are grappling with the consequences. Consumers have even less income available for discretionary use or for saving and investing. Producers have to deal with the costs of shipping increasing. However, these producers have been able to pass along most of the higher costs to customers. With the uncertainty around the world right now concerning things like the Middle East and Japan, the prices are not expected to decline any time soon.
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5 comments:
We have all definitely felt the rise in energy prices and some have noticed the rising cost at the grocery store. It sucks that pure speculation over political difficulties pushes up prices even though there isnt a change in supply or demand. Perhaps if we all had a planned economy we wouldnt have to deal with these stupid increases.
The rise in energy prices are due to the turmoil in Africa and the Middle East. According to the testimony by the Fed Chairman Bernanke, this situation is temporary. Moreover, our inflation is still low, just about 2% and we are still fear of deflation. Thus, just a little bit more of inflation will not hurt the economy any further
The trouble from the Middle East cuts the oil supply by a certain degree. As a result, oil price goes up, and this leads to a increasing costs for almost everything. Because transportation costs go up, and also production costs go up. If the oil remains high, there won't be any reasons that the prices would go down.
Higher prices is unfortunate for us as consumers given the fact that our economy is finally beginning to make its way out of the recession. Rising prices does not help people who don't have jobs because of the high unemployment rate. Because there is inflation, this gives consumers less and less flexibility to use their money for other things. This isn't a good thing especially for young adults graduating from college and are trying to start their life in the "real world".
I agree that we have all felt the increase in prices, as have our wallets. While we are all feeling the increases, consumers and producers alike, it is sad that these producers can get away with dumping the extra cost on the consumers. Being a consumer in this world means that you are forced to pay these high prices. Yes, we can refuse to pay for some items, but food and gas are necessities in life and we pay for that regardless of price.
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