Food prices may slowly edge up

Groceries in the check-out line of a store in Washington, D.C.

TEXT OF STORY

Bill Radke: You may have noticed the price of clothes and school supplies are flat lately, maybe even falling a little. Food prices, though, might be on the verge of edging up. So says the U.S. Agriculture Department. And Marketplace's Mitchell Hartman filed this report.


Wal-Mart commercial: It's nice to know Wal-Mart checks other stores' prices, to make sure I save on everything we need this summer.

MITCHELL HARTMAN: Summer may cost less at Wal-Mart. But its price is actually down everywhere. Milk is averaging $2.99 a gallon -- down a dollar from a year ago. Beef and eggs are also sharply lower. We can thank the recession, which has weakened consumer demand. Plus, a steep drop in energy prices. But Gus Faucher of Moody's Economy.com says that trend is over.

GUS FAUCHER: Farmers are going to be paying more for fuel, for fertilizer, that's going to increase their cost.

Which they'll pass on to consumers. So food prices will likely edge up 2-3 percent for the year. But Faucher says the rest of the stuff we buy may not go up at all.

FAUCHER: It's very difficult for firms to raise prices. People just don't have the income, they're still trying to boost their savings. And so they aren't spending as much and I think that's going to be, to some extent, a permanent change.

A change that may be good for consumers, but could drag down economic growth for some time to come.

I'm Mitchell Hartman for Marketplace.

About the author

Mitchell Hartman is the senior reporter for Marketplace’s Entrepreneurship Desk and also covers employment.

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