Rising food costs lift U.S. consumer prices in February
by Lucia Mutikani
Disruptions in the supply chain began to influence food prices, resulting in a rise in February. There is an expectation that this will reverse, however, as consumer cocooning is expected to depress demand soon.
With approximately 4,000 dead and more than 120,000 infected by the coronavirus, supply disruptions and shortages are expected to become commonplace and create some upward pressure on prices. It’s unclear how that will be offset by lower demand from consumers who will not be out shopping as much.
The article is titled about food, but it addresses other commodities. Crude oil prices are tumbling due to the price war between Russia and OPEC. Shortages are also expected for prescription medications and a myriad of other products that the U.S. gets from China. Typically, any disruption in supply is an indicator of looming price increases, but the coronavirus has introduced doubt.
Inflation is firming up as well. The CPI increased by 0.2% in February, about the same as in January. Underlying inflation was boosted by price increases in personal care, clothing, health care, used vehicles, and education. Airline fares and recreation prices fell due to the coronavirus.
There were also price increases in home furnishings, insurance, new vehicles, and alcoholic beverages, as well as rents.
For more, read the full article here.