The Attack of the Cash Register
President Obama's support among blacks and Hispanics has fallen to new lows according to a Gallup poll. Black support declined by 7% and among Hispanics by 11%, farther than at any point since his inauguration. Gallup says "it is not clear what is behind blacks' and Hispanics' less positive evaluations in March than in prior months. The major events of the month were the U.S. involvement in military action in Libya and the negotiations over the federal budget."
But there's another possible reason besides Libya and the deficit: inflation, starting with energy prices. The poor, including and especially blacks and Hispanics, are being hardest hit by increasing energy costs:
Lower-income households are paying nearly a quarter of their income for energy costs. ... Minority households are disproportionately impacted by higher energy costs. ... Senior citizens living on fixed incomes are particularly vulnerable to energy price increases. Seniors have the highest per capita residential energy consumption among all age categories.
The poor, the elderly, and minorities are being hurt, not just by energy prices, but across the board. There are concerns that inflation is back, despite very low Fed rates. Although the Bureau of Labor Statistics says "inflation is flat" after declining markedly after the economic meltdown in late 2008, it may now be on the rise again. Recently, Bill Simon, the CEO of Walmart, said that serious consumer price inflation lay just ahead:
"Every single retailer has and is paying more for the items they sell, and retailers will be passing some of these costs along. Except for fuel costs, U.S. consumers haven't seen much in the way of inflation for almost a decade, so a broad-based increase in prices will be unprecedented in recent memory."
Along with steep increases in raw material costs, John Long, a retail strategist at Kurt Salmon, says labor costs in China and fuel costs for transportation are weighing heavily on retailers. He predicts prices will start increasing at all retailers in June.
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