Tags: China | Price | Hikes | Hit | US | Consumers | Hard

China Price Hikes Hit US Consumers Hard

Tuesday, 21 Jun 2011 01:24 PM

Prices of imported goods are climbing, becoming a source of inflationary pressure as a wide variety of common products made abroad hit U.S. stores with much higher price tags.

"The days of watching our product drop in price relative to other retail products have ended," Kevin Burke, president of the American Apparel and Footwear Association, told The Wall Street Journal.

U.S. import prices, excluding oil, rose 8 percent over the past two years, a historic shift from their downward drift for two decades. The increase is bigger still when you include the price of oil, which is up due to global demand and turmoil in the Mideast.

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(Getty Images photo)
Most economists agree the United States. needs to consume fewer imported goods and export more American-made goods and services. Ironically for American consumers, the upward drift in the prices of imported goods is a mechanism that makes that happen.

Currency valuations play a large part in this as well.

The Chinese yuan has risen 28 percent against the dollar during the past six years.

Though a weaker dollar helps U.S. exporters, a stronger yuan plus the higher costs within China from domestic demand put price pressure on things U.S. shoppers want.

The Wall Street Journal reports that China's yuan was higher against the U.S. dollar on Monday after the central bank set its daily reference rate at a record low for the third straight session.

Traders said the yuan's rise was fed by significant sales of dollars by banks following several sessions of strong corporate demand for the U.S. currency for import settlements.

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Prices of imported goods are climbing, becoming a source of inflationary pressure as a wide variety of common products made abroad hit U.S. stores with much higher price tags. The days of watching our product drop in price relative to other retail products have ended, ...
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2011-24-21
Tuesday, 21 Jun 2011 01:24 PM
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