Inflation's next front is retailers as costs rise

[FRED]

What? An inflation spiral without wage inflation? Who could have known?

Inflation's next front is retailers as costs rise
July 28, 2008 (AP)

Manufacturers like Johnson & Johnson and Hasbro raise prices, pressuring retailers to do same

Coming to a store near you: Even higher prices.

Most inflation this year has come from food and fuel, as retailers resisted passing along to strapped consumers the higher prices manufacturers charged them, but coming increases from companies such as Johnson & Johnson and Hasbro Inc. may leave them with no choice.

"While these increases have not for the most part been passed on at the retail level, it is inevitable that they will be at some point," said Dean Baker, co-director of the Center for Economic and Policy Research. "Car dealers and other retailers cannot continue to absorb rising costs at the wholesale level and not pass some of these increases on to consumers."

AntiSpin: Sorry that iTulip is starting to read like one giant "I told you so."

Inflation is Dead! Long Live Inflation! (2005)
Inflation in America - Part I: Five signs of inflation
Dual Cycles of Demand Destruction and the Economic Face Plant

Don't blame us, blame these guys for being so predictable.

(With apologies to Metalman for the story in pictures.)

[metalman]

Re: Inflation's next front is retailers as costs rise

whatever... send a check to...

"Even Costco said it won't swallow price increases from suppliers on key items, but would postpone passing them along to consumers, if only for a few weeks, because it wants to be the last retailer to raise prices."

a few weeks, eh. hear that, bernanke? A FEW WEEKS! HELLO! ANYONE HOME!!!

[The Outback Oracle]

Re: Inflation's next front is retailers as costs rise

I can't give you the exact quote but the Chief Exec of GM certainly had a few strong words on inflation on CNBC the other day (maybe Friday). He certainly didn't mince words on teh subject.

[ocelotl]

Re: Inflation's next front is retailers as costs rise

Problem is that there is (although not mainly US based) a wage inflation.

Mainly companies based worldwide that have sale prices denominated in USD, face a wage inflation just by the declination of USD against the currencies of the overseas offices.

As of personal experience. I'm working on an Israeli based telecomms company, that has offices throughout the world, and we are facing financial issues due to the declining USD, since our sale prices are denominated on USD (Of course, for government sales we have to state the price on MXN based on the Banxico fix rate of a predetermined date). There is only one office in US, the rest have seen the same, a lower reneuve based on increasing costs and declining sale prices.

That's why I posted earlier that non US based transnationals whose sale price is based on USD are the canaries for the world wide job crash.

[LargoWinch]

Re: Inflation's next front is retailers as costs rise

I think what we are witnessing here is inflation feeding on itself.

Does anyone has any idea of what the Federal Reserve rate should be to tame the inflation beast? I understand that back in the day, Volcker had to raise rate 8%+ above the inflation rate.

Obviously doing so, would bankrupt most North Americans saddled with too much debt, so that is out of the question.

As a side note: here in downtown Toronto, there is quite a healthy line-up everyday waiting to buy gold and other PMs at ScotiaBank. Are people starting to dummy-up?