I'm trying to remember back to my 1988 philosophy class in logic. If A causes B, does the opposite of A cause the opposite of B? A=higher fuel prices. B=higher food prices. From CNN.com:
Worries about a global recession have pushed the price of oil to its lowest in over a year. Don't expect the same for a bottle of beer, a tube of toothpaste, or a box of cereal.
Companies are paying less to transport goods, but that doesn't mean prices will drop at stores.
That's what analysts call it when companies slap higher prices on products and keep them there even though the rationale for the price hikes -- such as soaring oil prices -- is gone.
The falling cost of oil could help companies pad their profit margins as they pay less to make and transport goods. But it won't mean a break on the average grocery bill.
The price of consumer goods typically lags behind the price of key inputs like oil and wheat, said Chris Lafakis, an economist with Moody's economy.com.
"Consumer prices don't change near as fast, because they are set by companies," Lafakis said. "Commodity prices are set every day on an open market."
The opposite is also true: Companies hesitate to hike prices because it might push consumers to into the arms of a competitor, or to cheaper alternatives.
