Gas and food prices surge to extreme costs

We close the week with gas pump prices at their highest ever for this time of year, but the economic news gets worse because food prices have been surging as well. KUSI's Ed Lenderman reports on these out of control prices.  

The double-whammy is fueling fears about our economic recovery and included in that, inflation worries.

We found Reine Elkrief, wife and mother of four, stocking up on food for the weekend. She, like everyone else these days, is lamenting the double-whammy that has hit consumers in early 2011. “I'm more careful with my budget, I've also got two kids in college, which is a concern, so obviously I'm shopping around for the best prices for everything,” said Elkrief.

Spiking oil prices have been the major economic news this week but rising food prices are now getting attention as well. The average price at the pump in San Diego is now $3.62 a gallon, up more than six cents since Monday and 12 cents in the last seven days. But the oil situation has also affected commodity prices.

It's not just elevated shipping costs, our severe winter weather has had a big effect on crops. Many analysts say another contributor is the fact that more corn is being diverted to the production of ethanol fuel instead of feed so the price of feed goes up, driving up the price of meat.

It all adds up to a major slowdown in the economy's recovery from the great recession.

The last time we had this combination of rapid oil and food price increases was 2008 and many analysts believe the combination was a major contributor to the recession.

Alan Gin, USD economic professor, doesn't believe that the current situation, will lead to the dreaded double-dip recession however he says the economy has strengthened “enough” that in his words, “we'll muddle through.”

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