Japan8

^ Dunno about that direct relation. More like the costs of labor are rising in China (due to labor shortage) and THAT is going to be the main factor driving up the costs of consumer products. http://www.nytimes.com/2006/04/03/bu...=1&oref=slogin

bascho

It will be a combination of both. Rising labors costs add to the fixed cost for the plant to make a product. But then they have to ship that product across the entire world. That is where fuel comes into play.....transit of consumer goods. Everyone knows that each step on the distribution ladder leads to an additional cost. The producer of the product sells it for $1. The carrier charges $2 to ship the product ($1 more than last year due to gas prices) so the distributer in the US has $3 into the product so far. Perhaps that regional distributer sells to a local distributer and doubles the price to cover his operating costs which include the increased cost of gas in their trucks (product now $6). Then the local distributer increases the price 1.5 times to cover his operating costs (which includes the cost of gas in their trucks) and sells the product to the retailer for $9. The retailer has to cover the costs of doing business so now they double the price. The end user now pays $18 for a product that they used to pay $12 for. That is how the cost of fuel can snow ball to inflation of every consumer product. Sure each middle-man could take a smaller and smaller percentage to help keep the end price down.....but they can only lower costs so much before they're out of business. Fuel price increases have a larger impact then most people account for.

Design1stCode2nd

Much more likely that we will be paying on average $4/gallon or more than it is to go back to $1/gallon.