Food prices may slowly edge up
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.
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