Multiple reports and financial analysts are warning that inflation is going to hit American consumers as prices of many goods have already started to increase in recent weeks.
The Wall Street Journal reported on Sunday that prices on everything from processed meat to household cleaning supplies and appliances have started to surge as consumers are “beginning to pay sharply higher prices for goods and services.”
“Costs are rising at every step in the production of many goods,” The Journal reported. “Prices for oil, crops and other commodities have shot up this year. Trucking companies are paying scarce drivers more to take those materials to factories and construction sites. As a result, companies are charging more for foods and consumer products including foil wraps and disposable cups.”
Kellogg Company Chief Executive Officer Steve Cahillane said, “We haven’t seen this type of inflation in many, many years.”
CNN highlighted some areas that are already seeing surges in inflation:
- Some are tied to commodities, which are getting snapped up as the global economy emerges from its long slumber. Lumber prices are at an all-time high thanks to an epic home-building boom. Copper and steel prices have also reached records.
- Agricultural products aren’t exempt. The price of corn is at its highest level since 2012. Same goes for soybean prices. Even sales of block cheese futures have been soaring in anticipation of grilling season.
- Then there’s consumer products. Diaper prices have gone up in the past year, and two major producers — Kimberly-Clark (KMB) and Procter & Gamble (PG) — have warned customers that fresh hikes are coming. Shortages of computer chips, meanwhile, are helping to push up car prices, and could soon do the same for electronics and household appliances.
Fed Chair Jerome Powell claimed in remarks to reporters last month that the inflation will be transitory and not “persistently higher year-over-year inflation into the future.”
Mo Apabhai, head of Asia trading strategy at Citigroup Global Markets said Sunday on “Bloomberg Daybreak: Asia” that while the disastrous jobs report on Friday may not give a lot of information about inflation, consumers should expect to see some sharp increases in the near future.
“But I think what the commodity prices and the input prices are really telling us is that inflation short term at least is going to have some very scary numbers,” Apabhai said. “You know, we’re going to be, for example, this week’s number in the U.S., we’re looking at something like 3.6%.”
“The administration will likely spin official statistics to play down bad news,” Washington Post columnist Henry Olsen warned. “This generation looks like it’s going to have its own rendezvous with inflation destiny soon. It won’t relish the experience.”