Please ensure Javascript is enabled for purposes of website accessibility
Inflation, Gas Prices, Tariffs Squeeze Consumers
gvw_ap_news
By Associated Press
Published 7 years ago on
August 1, 2018

Share

The price of a can of Coca-Cola? Likely going up. A package of Pampers? That too. Plane tickets? They also may be more expensive. These items and more may cost more in the coming months as people start feeling the effects of higher fuel prices and raw-material costs as well as a range of tariffs.

“The economy is doing great, so why is everyone doing so poorly?” — Janette Hendricks, retired nurse
Janette Hendricks said she has noticed higher prices on “just about everything” in the past three months or so. That’s put a little pressure on the recently retired nurse in Washington. So she goes shopping less often, “makes things stretch,” and she always shops for things on sale. She said she has also considered going back to work to have more cushion in the budget.
The consumer price index, the government’s primary measure of inflation, rose 2.9 percent in June from a year earlier, the fastest increase in six years. Starbucks had said in June that it had raised the price of a regular drip coffee, and McDonald’s said it raised prices when it reported its latest sales figures.
“I cut back on a lot of things,” said Ada Caro of New York, sitting outside a Target in lower Manhattan. “I just buy the necessities.”

Prices Increase on Many Items

Procter & Gamble, one of the biggest makers of consumer products, had said Tuesday that Pampers prices will increase by an average of 4 percent in North America, while the Bounty, Charmin and Puffs brands could see 5 percent increases.
Gas prices have already surged more than 24 percent in the past year. Rent and other housing costs were up 3.4 percent in June compared to a year earlier, and auto insurance has jumped more than 7 percent.
Hendricks said she and her husband also drive far less as they’ve noticed gas prices on the rise. Halla Byer, 28, has also seen the cost of filling up her car go up. The recently unemployed Portland, Oregon, resident feels optimistic about opportunities in the city, but joked of higher prices “making broke people more broke.”
The Federal Reserve, which tries to keep inflation at or slightly above 2 percent, has been raising interest rates to make sure that price pressures don’t get out of hand. Though President Donald Trump has criticized the central bank for raising rates, economists expect increases again in September and perhaps December.
Some of the higher prices also come as companies react to the Trump administration’s tariffs on steel, aluminum, lumber from Canada, and on $34 billion of imports from China. Beijing has imposed new duties on U.S. exports as well.

Tariffs Are Costing the U.S.

Overall, the aluminum and steel tariffs could cost the U.S. beverage industry nearly $348 million, according to The Beer Institute. Coca Cola has announced plans to raise prices, citing the cost of raw materials and packaging, though the impact on retailers and consumers is hard to gauge.

“Clearly, it’s disruptive for us. It’s disruptive for our customers.”James Quincey, Coca-Cola Co. CEO
Rising fuel costs are prompting airlines to cull unprofitable flights and consider boosting ticket prices. Spot prices for jet fuel are up about 50 percent from a year ago.
American Airlines Group Inc. saw its second-quarter profit plunge by more than a third as spending on fuel surged, and CEO William Douglas Parker warned about rising fares. Delta Air Lines Inc. CEO Edward H. Bastian said prices are up about 4 percent from last year.
“Pricing is certainly a function of cost, and with higher fuel prices, you’re going to expect to see ticket prices go up as well,” he told investors in July.
Industrial equipment companies are feeling the impact of the trade disputes. Caterpillar, which makes construction and agricultural equipment, said it plans to raise prices to offset the steel and higher material costs.
The National Association of Home Builders estimates that the tariffs the Trump administration placed on Canadian softwood lumber — along with other factors — have increased the cost of constructing a house by $7,000. Higher lumber prices may cause a slowdown in home construction, which would also mean a possible slowdown in job growth. Both building permits and ground breakings slowed in June, according to the Commerce Department.
“Any higher costs for material comes right out of our profit,” said Randy Noel, a custom builder in Louisiana and chairman of the home builders’ board.
Higher costs mean his company has only sold 30 homes this year, rather than the normal 40. He’s been using fewer subcontractors on projects — which means those workers lose income.
“They’re sitting at home and looking for remodeling jobs,” Noel said.

DON'T MISS

What Are Fresno Real Estate Experts Predicting for 2025 and Beyond?

DON'T MISS

First California EV Mandates Hit Automakers This Year. Most Are Not Even Close

DON'T MISS

Trump Says Putin May Not Want Peace and May Need to Be ‘Dealt With Differently’

DON'T MISS

Is It Bad to Chew Gum All Day?

DON'T MISS

Dollar Doubts Dominate Gathering of Global Economic Leaders

DON'T MISS

US Judge Temporarily Stops West Texas Immigrant Deportations Under Alien Enemies Act

DON'T MISS

Shedeur Sanders’ Long Wait Ends When Browns Take Him in the 5th Round of the NFL Draft

DON'T MISS

Only About Half of Republicans Say Trump Has Focused on the Right Priorities

DON'T MISS

ICE Deports the Mother of an Infant and a 2-Year-Old Who Is a US Citizen

DON'T MISS

Israeli Airstrike Kills 10 People, Half of Them Children

DON'T MISS

Shedeur Sanders Is Still Waiting for a Call as the NFL Draft Enters the Final Day

DON'T MISS

Israel’s AI Experiments in the War in Gaza Raise Ethical Concerns

UP NEXT

Only About Half of Republicans Say Trump Has Focused on the Right Priorities

UP NEXT

Israeli Airstrike Kills 10 People, Half of Them Children

UP NEXT

Shedeur Sanders Is Still Waiting for a Call as the NFL Draft Enters the Final Day

UP NEXT

Israel’s AI Experiments in the War in Gaza Raise Ethical Concerns

UP NEXT

Paul Skenes Strikes Out 9, Wins Duel With Yamamoto in Pirates’ Victory Over Dodgers

UP NEXT

Eovaldi Outlasts Verlander as Rangers Beat Giants

UP NEXT

Rams Take Oregon Tight End Terrance Ferguson in Second Round After Trading Out of First

UP NEXT

The Latest: Francis Is Remembered as a ‘Pope Among the People’ as He Is Laid to Rest

UP NEXT

Trump Now Doubts Putin Wants to End Ukraine War, a Day After Saying a Deal Was Close

UP NEXT

Virginia Giuffre, Voice in Epstein Sex Trafficking Scandal, Dies at 41

US Judge Temporarily Stops West Texas Immigrant Deportations Under Alien Enemies Act

10 hours ago

Shedeur Sanders’ Long Wait Ends When Browns Take Him in the 5th Round of the NFL Draft

10 hours ago

Only About Half of Republicans Say Trump Has Focused on the Right Priorities

13 hours ago

ICE Deports the Mother of an Infant and a 2-Year-Old Who Is a US Citizen

13 hours ago

Israeli Airstrike Kills 10 People, Half of Them Children

13 hours ago

Shedeur Sanders Is Still Waiting for a Call as the NFL Draft Enters the Final Day

14 hours ago

Israel’s AI Experiments in the War in Gaza Raise Ethical Concerns

14 hours ago

Paul Skenes Strikes Out 9, Wins Duel With Yamamoto in Pirates’ Victory Over Dodgers

14 hours ago

Eovaldi Outlasts Verlander as Rangers Beat Giants

14 hours ago

Rams Take Oregon Tight End Terrance Ferguson in Second Round After Trading Out of First

14 hours ago

Trump Says Putin May Not Want Peace and May Need to Be ‘Dealt With Differently’

President Donald Trump said Saturday that Russia’s escalating bombardment of Ukraine had left him concerned that Russia did not want to end ...

9 hours ago

9 hours ago

Trump Says Putin May Not Want Peace and May Need to Be ‘Dealt With Differently’

9 hours ago

Is It Bad to Chew Gum All Day?

9 hours ago

Dollar Doubts Dominate Gathering of Global Economic Leaders

10 hours ago

US Judge Temporarily Stops West Texas Immigrant Deportations Under Alien Enemies Act

10 hours ago

Shedeur Sanders’ Long Wait Ends When Browns Take Him in the 5th Round of the NFL Draft

13 hours ago

Only About Half of Republicans Say Trump Has Focused on the Right Priorities

13 hours ago

ICE Deports the Mother of an Infant and a 2-Year-Old Who Is a US Citizen

13 hours ago

Israeli Airstrike Kills 10 People, Half of Them Children

Help continue the work that gets you the news that matters most.

Search

Send this to a friend