Inflation shows up in grocery cart

Bob and Melody Cary know what it means when the government says inflation jumped 0.8 percent in July.

"We see it," Melody Cary said after shopping Thursday at the Safeway in Sebastopol.

The retired couple grabbed sale items, like the 2½ pounds of fresh blueberries for $5.99, $4 off the regular price. "That's a really good deal because you can freeze them," Melody Cary said.

That 0.8 percent consumer price hike was twice the expected rate, and it pushed inflation to 5.6 percent for the year, the highest rate in 17 years. Food prices were up even more at 6 percent, the government said.

"Gosh, I spent $32.47," Mary Powers of Santa Rosa said, studying her receipt outside the Safeway on Mendocino Avenue in Santa Rosa. "I remember when milk used to be 16 cents a gallon."

Milk is now about $3.50 to $4.50 a gallon, and it's up nearly 7 percent since last summer. Cheese is up almost 15 percent and eggs more than 9 percent, the U.S. Department of Agriculture said. Fresh vegetables cost 8 percent more; cereals and baked goods, 10 percent more.

Adrienne Garrison of Healdsburg drives to a discount grocer on Fourth Street in Santa Rosa. "If we come to the Grocery Outlet, we can get out of here under $100," she said. "I have to compare prices in order to survive."

Checking the ads, clipping coupons and growing more of their own food are among the strategies consumers are applying to curb their food costs.

Shirley and George Burger, both 80, grow tomatoes, green beans, eggplants and apples at their Santa Rosa home. "It takes a lot off the bill," Shirley Burger said.

Food prices went up 4 percent in 2007, the largest annual increase since 1990, the Agriculture Department said. The anticipated 4.5 percent to 5.5 percent increase this year has been surpassed, and the department's forecast for 2009 is 4 percent to 5 percent.

With American consumers spending more than $1 trillion a year on food, the increases amount to staggering sums.

Food price hikes are the result of an economic ripple that started with crude oil, which essentially doubled in price in a year, said Robert Eyler, a Sonoma State University economist.

Oil prices drove up gasoline costs, and that rippled through the food production and distribution chain, eventually settling on grocery store shelves, Eyler said.

"The working poor feel a disproportionate pinch," Eyler said, noting that lower-income families have little margin to absorb bigger grocery bills.

Marty Perea of Rio Nido, a postal worker on disability who receives two-thirds of her wages, is feeling the strain.

"I have to stretch my money out," she said, ticking off her obligations: food, gas, car payments, house payments, utilities. "You've got to survive."

In a Pew Research Center poll last month, 64 percent of respondents said their family income was falling behind the cost of living.

Some economists hope the recent pullback in crude oil prices may ease inflation in the coming months. But for now, the petroleum ripple is believed to be boosting prices for clothing, airfares and recreation.

The government calculates a core consumer price index that excludes food and energy because they are volatile. But even that rate, now up 2.5 percent from last year, is a half-point above the Federal Reserve's "comfort zone" for inflation.

"These are terrible times," Mary Powers said. Asked how she contains her living expenses, Powers said she spends less on clothing and entertainment. "I read more," she said.

You can reach Staff Writer Guy Kovner at 521-5457 or guy.kovner@pressdemocrat.com. You can reach Staff Writer Tracie Morales at 521-5274 or tracie.morales@pressdemocrat.com.