More inflation pain on the way

MSN Money's Anthony Mirhaydari explains why the still fairly tame behavior of prices overall may soon change.

By MSN Money Partner Aug 20, 2013 11:47AM

In the past few years, we've seen prices for food, fuel and health care go up, yet so far inflation has remained tame. Could this change soon? Should middle-class families expect to pay more for most goods and services?

In the video below, MSN Money's Anthony Mirhaydari explains why prices for necessities have been rising while overall inflation has remained low.

Inflation (© Stockbyte/Getty Images)The pace of U.S. consumer price inflation increased by 0.2% in July as the cost of goods and services -- from tobacco to apparel and food -- went up. The uptick pushed the annual rate of inflation, as measured by the consumer price index, to 2% -- the Federal Reserve's target rate.

Meanwhile, U.S. producer prices were flat in July, a sign that inflation remains contained despite the continued rise in energy prices. The producer price index was up by 2.1% year-over-year.

Mirhaydari, however, is looking at the accelerating global economy and warns we could see rising inflationary pressures soon. From Europe exiting recession to increased U.S. factory production to higher oil prices, all these forces are starting to filter through to prices. Inflation could get much higher because of a number of factors he explains in the video.

The discussion about inflation, prices and what to expect next continues over at MSN Money's Facebook community.

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Aug 20, 2013 2:22PM
Inflation has been tame? Food prices, Fuel prices, Rent prices, health care prices up, up,up and many by double digits. But inflation is tame? Somebody is a real big liar or doesn't know what the heck they are talking about! I think it's time to hold the government accountable for reporting real numbers for once.
Aug 20, 2013 2:31PM
Tame behavior? Anthony, you need to go shopping at a supermarket. Inflation never left my friend. Inflation by it's very definition is an increase in the money supply, that's what QE is. I just bought a Perdue whole chicken and a pork tenderloin at a major supermarket, the price....$25.11, and that's living in an area of the U.S. that has a low cost of living. Gas prices have teetered on the average of close to $4.00 a gallon nationally. The perception that inflation has remained tame is becuase the CPI formula for measuring inflation is unrealistic and disingenuous. Debt has been monetized and inflation exported overseas. There is a currency war going on, globally by all the central banks to debase their currencies in order to make their exports cheaper. The U.S. has been at the helm of this since QE I. I can't believe all the mainstream financial media outlets preach the same toxic ideology of low inflation. It's of no consequence why the average Joe American on the street despise Congress and Wall Street  slightly more than the media. All corrupt liars and deceivers who can't be trusted. The disinformation is on a unprecedented scale.
Aug 20, 2013 6:19PM

O.K., I've heard this term mentioned in this article "You have to have inflation to encourage growth". Huh?  I'll tell you what encourages growth, it's spelt J-O-B-S!!! Here's the deal...,  and this might be a little bit of a rant, and a tad off topic, but I'm getting really tired of listening to the talking-heads in the news media spill out bad economics and bogus reasons why thing are the way they are right now..


Back in the late 30's this country was just coming out of the great depression, poor as a church mouse, debt up to our ears, with WWII on the horizon. What did we do? The government went to big business and said we need 1,000 tanks by the end of December. Big business said, we don't build tanks we build cars, and beside that our people aren't trained to build tanks, nor do we have enough people to build them. The government said, "hire them, train them, you build tanks now"! And it was done. Following the war this country experienced the most prosperous 30 years of expansion and growth we've ever seen in our entire history. Mostly due to innovations in technology developed during that period. Yes, we had inflation, taxes were going up, and we still had a debt problem during those prosperous years, but guess what, nobody noticed? America was WORKING again and that was enough to encourage growth. So here's my point. Don't you wish just once, just once, our government today, would do something like they did back then. Not to control big business, we all know that's a bad idea, that's not my point here. But to have the balls to pass strict laws that say to big business, you hire illegal's you go to jail for a long time. Or, we're not going to stop from outsourcing, but if you do we're going to tax the hell out of your company. Or how'bout, we know your hesitant to expand your company, but if you do we will cut your taxes in half.  There's your growth right there, jobs + prosperity = GROWTH, we already have the model, our fathers, mothers, and grandparent taught it to us a long time ago. And we "don't" have to go war to accomplish it, we just have to have a government that believes putting American's back to work, on their "own soil", will cure all our ill's. Trust me, prosperity and growth will not be far behind.

Aug 20, 2013 1:37PM
NO, Obama said health prices would fall ,,and he would lower gas prices.  Don;t worry abiut food prices. Obama is the foodstamp President!!!
Aug 27, 2013 3:04AM
Everthing things goes up BUT OUR PAY
Aug 20, 2013 2:03PM
And with the increase of prices Taxes collected by the FEDERAL, STATE ,AND CITY will also rise

Aug 20, 2013 3:53PM
Inflation tame? you need to get out in the world Anthony!. Before the crunch in 2008 prices could have been called stable with seasonal variations but when fuel jumped, then no jobs and housing tanked some prices fell to get inventory out the door but now it is scary even to walk down the grocery isle let alone stop at a gas station. Even with the drought have you watched the basics rise? Flour, sugar, salt, eggs. My family would be hurting allot more even with two jobs if we didn't have a garden and two freezers. It used to be I could walk into a grocery store and lay down $600 and fill our pantry for the year. Now I lay down $100 and see only 5 or 6 bags in the cart. Not just last week you were saying time to buy gold - well you might be able to buy some things with gold but you don't get much nourishment. If you haven't planted a garden in awhile, the price seeds ought to set you back on the heels; not only have the packets tripled in cost they also have cut the amount by half. The price setters must think everyone they sell to are a bunch of uneducated people that don't take notice that they are being taken to the cleaners from all sides.
Aug 27, 2013 4:40AM
Tame ?  has anyone noticed that not only have food coast gone up over 30 % in the past 4 years but the package sizing is smaller.  cans of tuna are 5 ounces.   what used to be 1/2 Lb cheese is now 6 oz.  lunch meat  used to be 1/2 lb  now  7.5 oz.   anyone else notice how food is getting smaller packaging and the prices goes up.   when tuna went to 5 oz it was every brand like some sort of conspiracy and no one noticed and the price went up.  even cereal and chips are no longer the same size.    when you see the 2 for $5 at the super market its 6 oz packages of lunch meat not the old standard 8 oz.    look at granola bars  not only has the price gone up but you cant tell me the bars have not became 2/3 the size they used to be.  we are paying more and getting less so to you MSN  STFU !    does anyone writing this stuff at MSN live in the real world ?????   Tame ?   STFU MSN !    
Aug 20, 2013 12:07PM
During the 2003-2007 boom we went so far up in real estate and consumption that it'll be another 3-5 years before real inflation takes hold.  Americans have a really hard time ramping up spending when US wages are going nowhere because of globalization.  FED's out of bullets after creating a equity bubble.
Aug 27, 2013 3:37AM
Aug 27, 2013 5:04AM
Where oh where do these people live, shop, work? I keep reading these kind of articles. Inflation's been low, home sales booming, jobs can't be filled. Like I asked. Do these people actually live with us Joe Six Packs?
Aug 27, 2013 3:36AM
If prices on everything keep going up and pay does not, it won't be worth it to work. 
Aug 27, 2013 4:26AM
Yet another stunning success for President Obama - the most incompetent president in the history of the US (except maybe Carter). Now the poor "uninformed voters" (read ignorant, stupid voters) which voted for "hope and change" are going to pay the price for electing the most inexperienced, most inept president in the history of our nation.
Aug 20, 2013 12:25PM
If you have a TIPS fund and have been losing ground... consider how the government measures inflation now. It says... the item was a dollar yesterday and a dollar today, but doesn't consider that today's package is half the size it was yesterday. We have magnificent inflation already. The next move propels us into a wall of commonsense at Light Speed.
Aug 20, 2013 1:33PM
Is there more inflation pain to come?


Aug 20, 2013 4:13PM

The poeple who define the measurement system are the ones most to gain from it. Inflation is low because  they say so. Cant wait for my $10. box of wheaties and my $7. gallon on milk. thank God our healthcare costs will be going down under Odumbocare.

 Do not look at the man behind the curtain!




Just keep tabs on what things you buy that you need and you will see inflation has been north of 5 percent for years now.


The government now has transportation as people riding bicycles as they have substituted costs of transportation to alternate cheaper things until now they are at everyone rides a bicycle now and eats dirt out of their back yards and uses old sheets and drapes for clothing.


Pretty much you can not rely on the "official inflation rate" they are merely lying to you.


However that said the future is going to very bleak after 2015 for all Americans rich and poor as the dollar will collapse as no one will be trading in it nor needing it. So that $600 iphone will jump in price to over $10,000 US dollars until dollars will not be used to buy them but yuan.


Pretty much it will be game over folks. No home , no car , no bicycle , no food , no nothing.

Aug 20, 2013 2:12PM

The fed should have only three jobs.


1. Maintain an accurate and honest CPI.


2. Keep the real inflation rate between a deflationary 1% and 0% inflation (no more inflation). This will increase the purchasing power of the consumer. Also, this will bring real earnings to saving. If, savers can earn real income on savings, interest rates will stay low.  Also, it will increase the value of the dollar. This would move money to America (an estimate 5 trillion dollars).


3. Replace the fed with a computer program ASAP.


When inflation takes off and it will, it will destroy our economy. The consumer purchasing power is not increasing and inflation will eat it up.

Aug 27, 2013 4:30AM
inflation, relativity tame ?  MSN  stfu.  $4 for a lb of burger,  toilet paper 50 cents a roll  are you kidding me.     tame ?  TAME ?  stfu MSN.  in the past 4 years food prices  have gone up 30 %.  stfu MSN .    

Aug 20, 2013 5:59PM
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