"May 14, 2004 --
Price tag shock is heading into stores by Memorial Day due to soaring wholesale prices, with dairy pricesjumping to their highest levels in 58 years.
Retailers also are suffering a new shopping slump after their biggest boom in a year and could get hit harder when higher prices kick in, analysts
Labor Department data yesterday show factory and producer prices jumping more than twice the level that economists had expected - due primarily to
soaring crude oil and a shortage of raw materials being devoured at China's booming factories.
Some companies want to pass added costs to consumers right away, such as paint giant Sherwin-Williams, which in the past year has spent about a
quarter more for its petroleum used in paint-making.
Industry data are as grim as the government's, with the private Institute for Supply Management saying that prices paid for raw materials surged in
April at their highest pace in 25 years.
The government said prices of steel-mill products, for example, are at their highest rate in 30 years, surging 6.3 percent in April alone, the biggest
monthly jump since a 6.8 gain in July 1974.
The list of double-digit jumps in wholesale prices in the past year is long. Refrigerators are up 13.3 percent; animal feed, up 31.8 percent. Chicken
is up 18.3 percent, cooking oil's up 28 percent and eggs are 23.3 percent higher.
Analysts blame soaring oil prices, soaring above the the $40-a-barrel level this week.
"These prices are economy wreckers," said Peter Beutel, energy analyst at Cameron Hanover. "The emergency is here and now."
Some economists fear a domino effect from the wholesale price squeeze."
Excerpts taken from.
[Edited on 18-5-2004 by Muaddib]