Tags: Companies | prices | Fed | inflation

CNBC: Many Companies Raising Prices, Despite Fed's Lack of Concern

By Dan Weil   |   Tuesday, 05 Aug 2014 09:53 AM

While the Federal Reserve has stated that it considers inflation to be well under control, some companies are raising prices by substantial amounts.

Companies across all industries are increasing their prices, according to CNBC.

Food companies have raised their prices due to climbing commodities prices. For example, Hershey is raising prices by an average of 8 percent for a majority of its products in the United States. "Commodity spot prices for ingredients such as cocoa, dairy and nuts have increased meaningfully since the beginning of the year," a Hershey executive said in a statement.

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Hershey competitor Mars is lifting it North American prices by 7 percent, the first increase since 2011.

And Kraft announced last week that it raised prices on cheese between 5 and 12 percent and many Oscar Meyer products by an average of 10 percent. "Beef, turkey and pork prices for our cold cuts have continued to increase and are at record highs as we speak," the company explained.

Fast-food restaurants across the country, including Chipotle and In-N-Out, are hiking prices because of higher meat costs, CNBC stated.

In addition, Starbucks, J.M. Smucker and Kraft are boosting their coffee prices, as they have to pay more for the beans.

Ford is increasing prices for its trucks, and Nike is raising prices for apparel and shoes.

"Inflation is here, regardless of whether it shows up in the Federal Reserve dashboard," CNBC noted. "Consumers are feeling it and will feel it further, whether it's driven by an increase in consumer demand, or simply as a way for companies to keep churning out impressive profits."

Consumer prices rose 2.1 percent in the 12 months through June. The personal consumption expenditures index, the Fed's favored inflation measure, climbed 1.6 percent in the 12 months through June.

The Fed's inflation target is 2 percent.

To be sure, some private economists share the Fed's comfort with recent inflation data. "The economy and the recovery remain on track, neither too hot nor too cold," Laura Rosner, U.S. economist with BNP Paribas, told Bloomberg, commenting on the latest consumer price figures.

The Fed "can continue with accommodative policy," she said.

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