Well, except housing prices in Southern California, which fell to the lowest level since 2009 last month. But in the coming months, retail analysts say consumers will be paying more for everything from clothing and coffee to washing machines and Velveeta cheese. That’s because the cost of materials is on the rise. Cotton hit an all-time high of $1.90 per pound – that’s twice the price from a year ago. Copper costs a lot more than a pretty penny, hitting its highest level in about four decades. Prices for corn, sugar, wheat and meat are also soaring. Leather, polyester and synthetic materials have also jumped, so chaps and spandex leotards will hit wallets harder by fall. During the recession, many manufacturers and retailers absorbed the creeping costs of commodities out of concern that shoppers wouldn’t fork out the extra cash while the economy was so fragile. But now many big companies like Kraft say they’re going to have to start passing the costs on to consumers. Economists say the increases may result in higher inflation. Will consumers push back? If profits are squeezed, will employers be less likely to hire?
Guests:
Andrew Fieldhouse, federal budget policy analyst, Economic Policy Institute
Chris Thornberg, Principal, Beacon Economics