Consumer price watch
The increase is calculated for a group of goods that the average consumer is likely to purchase. Part of that group is food, which has gone up 4.4% over the last year. Energy costs were the biggest driver of the increased pricing, going up 17% over the most recent 12 month period. What went down? Clothing costs, with a 1.3% drop in prices, a huge drop for that sector.
Fear not: Even though consumers and the media are all panicked about "the recession," we are not in a recession. The economic data just doesn't support it. Even though prices our up, our economy continues to grow. A recession means that our economy has declined for two consecutive quarters, and we're just not there. (We don't even have one quarter of decline under our belts!)
I say consumers should continue to budget carefully and save for a rainy day as much as they can. Eating at home is one of the best ways to offset the rising food costs, and by staying home you'll also save gas to help deal with the rising energy costs. Consumers do have lots of options to help with saving and responsible budgets. (And WalletPop is one great way to be aware of the great deals available to consumers!)
Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.