McDonald's and Wal Mart Warn of Inflation

GeorgeWashington - The signs for inflation in food and basic consumer goods are widespread.

McDonald's is warning of inflation in food prices:

McDonald's Corp forecast higher prices for beef, dairy and other items and said it would cautiously raise prices to keep attracting diners, who are grappling with higher grocery and gas bills.

McDonald's and other restaurant operators are getting squeezed by accelerating food costs and must figure out how to raise prices without scaring away already skittish diners.

Similarly, the American head of Wal Mart - the world's biggest retailer - is warning of price hikes across the board:

U.S. consumers face "serious" inflation in the months ahead for clothing, food and other products, the head of Wal-Mart's U.S. operations warned Wednesday.

Inflation is "going to be serious," Wal-Mart U.S. CEO Bill Simon said during a meeting with USA TODAY's editorial board. "We're seeing cost increases starting to come through at a pretty rapid rate."

And as the New York Times notes, food producers are selling smaller portions for the same price, due to cost - push inflation:

With prices for energy and for raw materials like corn, cotton and sugar creeping up and expected to surge later this year, companies are barely bothering to cover up the shrinking packs.

While it's tempting to say we've got inflation, things are not so black-and-white... GeorgeWashington