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The Honolulu Advertiser
Posted on: Thursday, April 17, 2008

RISING PRICES
Airfares, energy drive inflation up

By Martin Crutsinger
Associated Press

Hawaii news photo - The Honolulu Advertiser

Consumer prices rose last month as increases in energy, food and airline tickets overwhelmed a big drop in the cost of clothing.

MIKE GROLL | Associated Press

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WASHINGTON — Inflation rose again last month, reflecting big jumps in the cost of energy and airline tickets. And the forecast is for even bigger energy-related increases to come, including the possibility of $4 per gallon gasoline by Memorial Day.

Those inflation pressures are occurring just as the economy seems to be sinking into a recession, with consumers cutting back on spending and the housing industry, where all the troubles started, sinking further.

That was the somber news from a batch of economic reports released yesterday.

The Labor Department said consumer prices rose by 0.3 percent in March, as energy prices jumped by 1.9 percent and airline fares, reflecting higher fuel costs, increased 3 percent, the biggest one-month gain in six years.

Food prices, which have been steadily rising for more than a year, were up by 0.2 percent in March and 4.4 percent over the past 12 months. The price of some food staples showed even bigger increases over the past year, including a 14.7 percent rise in the price of bread and a 13.3 percent increase in milk prices over the past year.

"People are going to be paying a lot more for gasoline and groceries in the months ahead," said Mark Zandi, chief economist at Moody's Economy.com. "Nothing is going right at the moment. That is why consumer confidence has fallen to the lowest point since the early 1980s."