Food and Gas Prices Straining Budgets
Recently Americans have been worried about the rising cost of fuel and noticed the prices going up and up at the gas pumps.
However, gas is not the only essential item that is costing more money these days.
As gas prices go up, food prices are also rising and stretching many family budgets to the breaking point--some families are even filing bankruptcy thanks to the increase in everyday spending.
A recent article in the Chicago Tribune indicated that there is evidence that consumers are cutting out frivolous spending at the grocery store and switching to generic and less expensive product brands in an effort to keep their grocery bills under control.
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A recent government report showed that food prices have an impact on overall inflation, so the rising cost of food is not good news for the country.
Food manufacturers are seeing huge cost increases for ingredients such as milk and grains, and since it now costs them more to make the foods that Americans buy, they are passing the cost increase on to their customers and attempting to gauge how much people will pay before they stop buying. There are indications that consumers are reaching their limits.
With the foreclosure crisis in the U.S. showing no signs of slowing down, credit card debt at an all time high and mass layoffs happening from coast to coast, it is evident that Americans no longer have a surplus of money to spend.
Many people file bankruptcy to relieve the enormous pressure of their crushing debts; others are hobbling along and trying to make the best of the situation and trying to make their money go as far as they can. That means no more splurging on Starbucks, pricey organic products and other unnecessary extras.
Food and gas are two items that Americans absolutely have to spend money on, and the prices of both are on the rise.
The Federal Reserve chairman, Ben Bernanke, was on Capitol Hill this week to speak about consumer inflation. Bernanke explained that the price of food is going up substantially due to the rising cost of oil while the dollar is depreciating.
CNN reports that in the past year, milk prices have risen 17 percent, the cost of eggs has gone up 35 percent and bread prices are already 6 percent higher this year and are predicted to rise due to rising wheat costs.
In addition to the price of food and gas getting out of control, the dollar is weak and getting weaker. So in addition to having to pay more money for essential things, the money is worth less and that compounds the problem.
While the U.S. government recognizes that there is a problem with the economy and many Americans will be receiving tax rebate checks in a few weeks, it will just be a drop in the bucket for many people.
After the tax rebate checks pay the heating bill and maybe buys a few high price groceries, then what?