The Price Increases Have Begun

[Buckeye]

After getting my Scrabble fix this morning at the nursing home, I stopped by Wendy's for a baked potato and a side salad for lunch. They cost $1.19 each last week. Today they cost $1.49 each. Yikes, a 25% increase! "Due to the cost of gas" says the youngster at the window when I inquired whether prices had gone up.

 

[ziggy29]

Yes, fuel prices have a ripple effect on the cost of almost everything, but I think blaming everything on gas prices is a cop-out and a convenient excuse.

 

[RockOn]

After getting my Scrabble fix this morning at the nursing home, I stopped by Wendy's for a baked potato and a side salad for lunch. They cost $1.19 each last week. Today they cost $1.49 each. Yikes, a 25% increase! "Due to the cost of gas" says the youngster at the window when I inquire if prices had gone up.

...have begun.

Don't worry the BLS CORE CPI is running below 3%, you'll be just fine. All you have to do is not eat or drive, just buy more other linens and clocks lamps and decorations. It's really easy.

Awhile ago I said at least my car insurance isn't going up very fast despite the fact they lowered what they cover (when from a no fault system to a tort system for injuries). That was then, now is now; just got my yearly renewal statement, up around 10% on my increased depreciated vehicles. So much for that!

 

[2B]

After all the ways high gas prices are killing the economy, I decided to look at what impact gasoline has on my spending. YTD, DW and I are averaging $300 / month for gasoline. If gas went to $2, we'd save $100 per month. That's hardly going to make or break most family budgets if they actually had a "budget" and not a credit card to meet their whims.

Commodity and energy costs are creeping into our cost structure. People are becoming more selective where they spend money and I suspect some of the price increases are designed to make up for lost customers. I think they will find themselves in worse trouble as more customers opt out.

 

[REWahoo]

After all the ways high gas prices are killing the economy, I decided to look at what impact gasoline has on my spending. YTD, DW and I are averaging $300 / month for gasoline.

You got me thinking so I took a look at our trend on gas spending since retiring:
2006 - $153/mo
2007 - $229/mo
2008 - $303/mo

Certainly not a good trend but hardly a budget buster...until I saw my average for the last two months: $440. Yikes!

 

[FIREd]

According to Quicken:

average monthly gas spending:
2006 - $118
2007 - $151
2008 - $145... Don't know why it's lower this year, we're not trying to drive less.

average monthly food spending (groceries):
2006 - $470
2007 - $561
2008 - $584

So this year a slight increase but nothing too concerning.

 

[dgalbraith100]

Average gas:
2003: $67/month
2004: $110
2005: $148
2006: $ 91 - Moved closer to work.
2007: $140
2008: $150



Average "Groceries"/Dining Out:
2003: $427/Month (3 in family)
2004: $503
2005: $622
2006: $742 (4 in family)
2007: $927
2008: $859


Unfortunately when it comes to food/groceries, you can't look at my budget to say things are getting more expensive at least not at this level. The second child adds quite a bit because I count diapers and that sort of items in groceries, not just pure food items. Groceries in my budget are the go to the store weekly and buy the things you "need". Items outside of that are tracked differently, but some non-food items (shampoo, diapers, toothpaste, toilet paper, Misc DVD, ..., get counted as groceries. If I buy a large item, say a computer printer in the same trip, I would mark that different, but a DVD movie I just don't bother to remove that from the grocery category.)

The big change from 2006-2007 is we started eating out more
In 2006 we went out to eat a total of: 229 times
In 2007 we went out to eat a total of: 386 times
In 2008 so far we have gone out to eat a total of: 177 times which should put us ~350 times for the year.

I know eating out is expensive, I enjoy it, I can afford it, I do it. Get over it.

Laters,
-d.

 

[Notmuchlonger]

1/1/06 to 5/31/06- 5110
1/1/06 to 5/31/06- 333

1/1/07 to 5/31/07 groceries,booze,cleaning supplies 5700
1/1/07 to 5/31/07 fuel- 381

1/1/08 to 5/31/08 same-6674
1/1/08 to 5/31/08 fuel- 419

 

[RockOn]

1/1/06 to 5/31/06- 5110
1/1/06 to 5/31/06- 333

1/1/07 to 5/31/07 groceries,booze,cleaning supplies 5700
1/1/07 to 5/31/07 fuel- 381

1/1/08 to 5/31/08 same-6674
1/1/08 to 5/31/08 fuel- 419

That sure doesn't look like 4% inflation to me.

 

[Notmuchlonger]

That sure doesn't look like 4% inflation to me.

Who said anything about 4% inflation?

 

[ladelfina]

REWahoo, you gotta heed 2B. It's not just what you personally spend on gasoline. Look around you and find something not made with, or brought to you by, petroleum. Who hasn't seen the effects in other stuff, will. I don't know how much is speculation, or decreased production, but the fact is this will be passed on if it hasn't been already. I think I heard either Dow or Dupont was raising prices 20% across the board.

PPI (Producer Price Index) appears to be double CPI:
ESBR: Prices

 

[REWahoo]

REWahoo, you gotta heed 2B.

Oh, I did. No annuity for me...

 

[RockOn]

Who said anything about 4% inflation?

Independent and the your BLS

 

[Notmuchlonger]

Independent and the your BLS

My tinfoil hat protects me from the radio waves.

 

[RockOn]

My tinfoil hat protects me from the radio waves.

Good job, radio waves can be damaging to ones health.

 

[Notmuchlonger]

Good job, radio waves can be damaging to ones health.

I know they might make people sterile too..

 

[plex]

I am certainly concerned with the increases in prices, but on the other hand, I live on so little, that even a 50% increase from almost nothing really isn't that much more than almost nothing and as such I could easily handle it.

The more you LBYM, the less you are affected by temporary spikes in prices for basic commodities.

I haven't really noticed my food costs increasing all that much, it might have gone up from $100-110 to maybe $120 or so a month. The gas prices hurt a bit though, gas is probably my second highest expense after rent, regardless though, quite manageable.

 

[Helena]

I bought some nice packages of sunflower seeds
at the dollar store a month ago... so I went back
to buy more... the cost was the same, but when
I got home, I notice the package was a different
color... and sure enough, the weight had been
reduced from 10 oz to 7.5 oz.


~

 

[FIREd]

The big change from 2006-2007 is we started eating out more
In 2006 we went out to eat a total of: 229 times
In 2007 we went out to eat a total of: 386 times
In 2008 so far we have gone out to eat a total of: 177 times which should put us ~350 times for the year.

I know eating out is expensive, I enjoy it, I can afford it, I do it. Get over it.

Laters,
-d.

Your post made me check how often we ate out last year... Quicken says only 9 times for the whole year!!!!!! We really got to start living it up a bit!

 

[Midpack]

Sure is refreshing to see one of these threads with actual data for a change to give the discussion some factual basis...

 

[socca]

I know [radio waves] might make people sterile too..

Women who wear lead-lined chastity belts and men who wear lead-lined jock straps should escape with their fertility intact. My only concern is if at some time in the future these are the only people capable of reproducing, would they?

 

[ziggy29]

Looking back at my Quicken figures:

Gas:
all 2005 -- $875
all 2006 -- $1,727 (circumstances changed requiring more driving in '06)
all 2007 -- $2,212
2008 YTD -- $1,045

Note that in 2006 and 2007 I had to commute to the Austin office (75 miles each way) more than I do now, and in 2005 we lived in Houston less than a mile from where I worked. Plus we bought a second car in '06.

Food plus dining out:
all 2005 -- $11,718
all 2006 -- $12,089
all 2007 -- $9,801
2008 YTD -- $4,390

There was definitely conscious cutbacks on the latter category (particularly eating out) in 2007, though not specifically as a response to doom and gloom.

 

[Texarkandy]

....
Commodity and energy costs are creeping into our cost structure. People are becoming more selective where they spend money and I suspect some of the price increases are designed to make up for lost customers. I think they will find themselves in worse trouble as more customers opt out.

In my admittedly non-expert opinion:

I think due to the inflation in fuel and food, consumers overall will be spending less on everything non-essential for a while. There will be some price increases at first due to shipping & raw materials (what we're seeing now), but overall businesses (foreign & domestic) will try to make up the reduced sales of their products/services first by reducing costs/overhead. (cutting production/jobs!/etc). Do more with less, as they say. Then will come the further price increases if necessary - but that can only go so-far on non-essential products/services.

Those businesses who are well capitalized to weather the storm will be able to hang on - bolstered by the weeding-out of less well-capitalized competitors who will go out of business.

 

[2B]

Sure is refreshing to see one of these threads with actual data for a change to give the discussion some factual basis...

Unfortunately, all we have is a bunch of personal stories from probably the cheapest b*st*rds on earth that will spend money for internet access and a computer. You won't be able to take any of our stories and run for public office on them. I don't think any of us collect aluminum cans off the side of the road to buy gas for our motor home.

My original and continuing point is that what gets hyped in the media as "crushing the average American" doesn't make much sense to me. Energy costs will work their way through the system and ultimately make people shift their spending patterns. I personally have not seen gas or food prices rise enough to make me change my habits. Some companies will try for significant price increases under the cover of "gas prices" but I believe they law of supply and demand will ultimately win out.

Airlines are finally doing what they have needed to do for decades which is to cut capacity. Before this fuel cost mess, they were more than willing to sacrifice anything for "market share." Somebody paid too much attention to that part of their MBA program and forgot that the basic responsibility of a business is to be profitable.

 

[ziggy29]

Before this fuel cost mess, they were more than willing to sacrifice anything for "market share." Somebody paid too much attention to that part of their MBA program and forgot that the basic responsibility of a business is to be profitable.

Yes, we lose money on every passenger, but we make up for it in volume...