How Big Is the Risk of Inflation?

Gasoline’s huge price overshadows rising prices for airfares, used cars, beef and other items.

Despite the plodding pace of the economy, price increases are starting to spread, raising alarms about inflation. With the economy still in low gear, an inflationary spiral isn’t a huge possibility. Unemployment is so high that workers won’t be able to demand big wage hikes.

But there’s increasing evidence that the tide is changing. Some prices are, in fact, surging: In the past 12 months, airfares, for example, have climbed by nearly 12%. The average cost of used cars is up 15%. Hospital bills have climbed by 5.4%. And shoppers are paying an average of 9% more to put beef on the family dinner table and a whopping 16% more for pork

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Jerome Idaszak
Contributing Editor, The Kiplinger Letter
Idaszak, now retired, worked on The Kiplinger Letter as its economics writer for 21 years. Before joining Kiplinger in 1992, he worked for 15 years with the Chicago Sun-Times, including five years as a columnist and economic correspondent in the Washington, D.C., bureau, covering five international economic summit meetings. He holds bachelor's and master's degrees in journalism from Northwestern University.