Inflation?

“The price of anything is the amount of life you exchange for it.” - Henry David Thoreau

The economy is in a funny state. Officially the inflation rate is very low. The Bureau of Labor Statistics (BLS) says that consumer prices in August grew at an annual rate of just 1.1%. This consumer price index tracks the price for a basket of products from ...

• FOOD AND BEVERAGES (breakfast cereal, milk, coffee, chicken, wine, full service meals, snacks)
• HOUSING (rent of primary residence, owners' equivalent rent, fuel oil, bedroom furniture)
• APPAREL (men's shirts and sweaters, women's dresses, jewelry)
• TRANSPORTATION (new vehicles, airline fares, gasoline, motor vehicle insurance)
• MEDICAL CARE (prescription drugs and medical supplies, physicians' services, eyeglasses and eye care, hospital services)
• RECREATION (televisions, toys, pets and pet products, sports equipment, admissions);
• EDUCATION AND COMMUNICATION (college tuition, postage, telephone services, computer software and accessories);
• OTHER GOODS AND SERVICES (tobacco and smoking products, haircuts and other personal services, funeral expenses).

However while the overall consumer basket is price stable, some individual components, like food, are skyrocketing in price.

Bottom Line

While you can get great bargains on discretionary items like electronics and clothing, the essential items like food and gas are shooting up in price. Be prepared to pay more over the next year for the basics.

"On average, our basic food costs have increased by an incredible 48% over the last year (measured by wheat, corn, oats, and canola prices). From the price at the pump to heating your stove, energy costs are up 23% on average (heating oil, gasoline, natural gas). A little protein at dinner is now 39% higher (beef and pork), and your morning cup of coffee with a little sugar has risen by 36% since last October."  - the Casey Report

Update
http://online.wsj.com/article/SB10001424052748704506404575592313664715360.html?mod=WSJ_hp_mostpop_read
Food prices are rising faster than overall inflation. ...The U.S. Agricultural Department is predicting overall food inflation of about 2% to 3% next year.