Search This Supplers Products:Supermarket Gatesupermarket gateturnstilecash counterBarrierHardware
US food price rise is steepest in decades
time2011/12/24
The cost of producing finished foods jumped 3.9pc last month from a year earlier, as harsh winter weather exacerbated the already increasing price of many basic ingredients used in food. The increase was the steepest since November 1974.
With oil price strip having spiked on the political upheaval in North Africa and the Middle East, energy costs were 3.3pc higher in the month, according to a report on producer prices from the Labor Department.
Ben Bernanke, chairman of the Federal Reserve, insists these sharp rises in costs will prove transitory and will not spiral into a broader price increases across the economy. Core producer prices, which strip out food and energy, climbed just 0.2pc in the month and were down from January's level.
However, analysts pointed out the threat to a quickening recovery should food and energy prices head further north. "Higher costs are both squeezing profit margins and consumers' spending power," said Nigel Gault, an economist at IHS Global Insight.
The economy suffered a further blow with new data showing better times for the country's housing market appear no nearer. New home construction plunged 22.5pc in February to an annual rate of 479,000, the Commerce Department said yesterday.