Crazy prices by Barbora Misakova

Where are the times when we could buy bread for small change and lollipop cost just a smile? The economic situation is changing incredibly and sometimes we feel like prices are crazy! In last year consumer prices rose fastest than 17 years ago. Economic reports shows consumer prices rose up from 2006 by 4.1 per cent and the largest amount was for energy and food. Other plumb less changes were recorded in health care, housing and education where prices were increasing, but prices for cars, clothing and computers are lower than before. Still increasing gases prices are alarming and not only people but also pump stations' owners are afraid. Prices of gasoline could jump 24 cents a gallon in next few days. As Peter Beutel, president of energy-price tracker Cameron Hanover said it will be horrendous. On the other hand, Michael Burdette, senior analyst at the U.S. Energy Information Administration, thinks these price changes will need more than 8 weeks to be reflected in pump prices. Another rising affected grocery prices when shoppers had to paid higher food bills. The biggest changes and price's rises are expected especially in dairy, meat, wheat, fruit and vegetables. The statement of executive director of the Australian Farm Institute says it clearly: "There will be some tightening of the household budget." Food prices were jumping higher from March 2006 and it seems to be continuing. The biggest enemy of economic is inflation. Inflation is an economic effect in which duration a long-lasting increase of prices' level occurs. Inflation influences not only prices of goods and services but also wages and salaries and in most cases wages are incapable to fight against it. For instance in 2007 average weekly earnings dropped by almost one percent which represents in last 5 years the 4th deepest decline. Also the value of the U.S. dollar has fallen recently and most of sellers want more dollars for their supplies to compensate problems connected with inflation. Economy is incredibly complicated but also sensitive system which is constantly changing and governments had a lot to do to manage this situation.

related story: http://news.yahoo.com/s/ap/20080116/ap_on_bi_go_ec_fi/economy;_ylt=Av8GjV6B4Ntq886a1SS_JaKs0NUE

by Barbora Misakova for PocketNews (http://pocketnews.tv)

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