The National Inflation Association says the Federal Reserve is wrong about inflation: U.S. food prices are spiraling out of control, jumping 2.4 percent in March, the largest leap in 24 years.
Combined with the highest unemployment in decades, higher food prices have caused huge numbers of Americans to turn to the food stamp program for help.
After the 14th consecutive monthly food price increase, 39.4 million Americans are now enrolled in the program, up 22.4 percent from one year ago.
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The U.S. government is now paying out more in entitlement programs than it collects in taxes.
Year-over-year, fresh and dry vegetables are up 56.1 percent, fresh fruits and melons are up 28.8 percent, eggs for fresh use are up 33.6 percent, beef and veal are up 10.7 percent and dairy products are up 9.7 percent.
The group points out that 58 percent of February’s year-over-year increase in retail sales came from surging food and gasoline prices, improved consumer confidence.
The organization also reports that price inflation is also accelerating in many economic sectors besides food and energy, and that any increases in 2010 U.S. retail sales will be the result of inflation.
Rising food costs also threaten the restaurant industry’s fledgling recovery, according to a new study by AlixPartners LLP, the global business-advisory firm.
“Despite some stabilization of late, the restaurant industry is by no means out of the woods,” Andy Eversbusch, a managing director at AlixPartners and head of the firm’s Restaurant & Foodservice Practice, told Earth Times.
“Meanwhile, we predict that food commodity prices, whose record lows provided a ‘pseudo bailout’ to the industry in 2009, will rise substantially going forward, so the operating efficiency of many restaurant players will be severely tested.”
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