Inflation Set to Rise on Price of Groceries and Clothing – Those Seniors who received no COB on Social Security will Feel the Pinch!

Food Shrinkage Explained: From SlowPokeComics.com

As any consumer has noticed, the price of certain grocery items have remained relatively stable, however, the size of the packaging has appeared to have shrunk in the past year or two, now, according to an article in the Wall Street Journal, the price of certain groceries and clothing will rise by approximately 4.5% this year. It’s a rise in the price of commodities that is to blame, once again. Back in 2008, the price of fuel rose as speculators (commodities traders) drove the price per barrel up over $145, which resulted in inflated pricing at the pump. Additionally, a weakened U.S. dollar was blamed for the overall increase.

What inflation?

The Bureau of Labor Statistics produces reports on the Consumer Price Index, which “explains” and sets inflation. The seasonally adjusted rate of inflation for 2010 (released January 14th), showed an overall increase of 1.5%. Not factored in to the actual rate of infaltion are: fuel and food costs. (BLS) Figures from this particular agency are used to calculate the cost of living increases for Social Security Recipients (otherwise known as “creative accounting”, who, for the past two years, were not given a cost of living increase due to low or no inflation. (CBS)

However, those on the receiving end have watched, in certain states, their taxes rise, affecting utilities as well as paper goods purchased at the retail level, and basic necessities. Food packaging shrinkage plays a part; for an example, according to a Newsweek article in 2008, the price of a large container of a brand name Orange Juice remained the same, however, the size fell from 96 to 89 ounces. Therefore, the price of orange juice, actually rose by 7%, when one adjusts pricing for the loss of ounces/weight in particular food package. That was based on 2008 figures.

Now, according to the Wall Street Journal, pricing will rise on items such as margarine, flour, and sugar, as well as clothing made from cotton, which has seen a 92% rise in the price of commodities (the actual projected retail costs would be 4.3% for blue jeans, expect up to 20% increases in sugar and 18% in flour (See Table in article from WSJ here .

Again, depending upon where one lives, pricing on certain items such as clothing, will experience a boost from state and or local sales taxes as well. For those seniors who rely on Social Security, perhaps those who set the inflation rate will revisit the COB and offer a mid-year increase to compensate for the increase in inflation in those areas that are critical to survival.