summerfashionshop

Back in the '80's, the money people made guess handbagstypically more than made up for high inflation. In 1981, banks would pay nearly 16 percent on a six-month CD. And workers typically got pay raises to match their higher living costs.

No more.

Over the 12 months that ended in February, consumer prices increased just 2.1 percent. Yet wages for many people have risen even less — if they're not actually frozen.

Social Security recipients have gone two straight years with no increase in benefits. Money market rates? You need a magnifying glass to find them.

That's why even moderate inflation hurts more now. And it's why if food and gas prices lift inflation even slightly above current rates, consumer spending could weaken and slow the economy.

Consumer inflation did pick up in February, rising 0.5 percent, because of costlier food and gas. Still, womens summer fashion 2011 looked at over the past 12 months, price increases have remained low. Problem is, these days any inflation tends to hurt.

Not that everyone has been squeezed the same. It depends on personal circumstances. Some families with low expenses or generous pay increases have been little affected.

Others who are heavy users of items whose prices have jumped — tuition, medical care, gasoline — have been hurt badly. But almost everyone is being pinched because nationally, income has stagnated.

The median U.S. inflation-adjusted household income — wages and investment income — fell to $49,777 in 2009, the most recent year for which figures are available, the Census Bureau says. That was 0.7 percent less than in 2008.

Significant pay raises are rare during periods of high unemployment because workers have little bargaining power to demand them.

They surely aren't making it up at the bank. Last year, the average nationwide rate on a six-month CD was 0.44 percent. The rate on a money market account was even lower: 0.21 percent.

Now go back three decades, a time of galloping inflation, interest rates and bond yields. When Paul Volcker took over the Federal Reserve in 1979, consumer inflation was 13.3 percent, the highest since 1946. To shrink inflation, Volcker raised interest rates to levels not seen since the Civil War.

As interest rates soared, CD and money-market rates did, too. The average rate on money market accounts topped 9 percent. Treasury yields surged, pushing up rates on consumer and business loans. The 10-year Treasury note yielded more than 13 percent; today, it's 3.5 percent.

By 1984, consumers were enjoying a sweet spot: Lower prices but rising incomes and still-historically high rates on CDs and other savings investments. Consumer inflation had slid to 3.9 percent. Yet you could still get 10.7 percent on a six-month CD.

Even after accounting for inflation, the median income rose 3.1 percent from 1983 to 1984. At the time, workers were demanding — and receiving — higher wages.

More than 20 percent of U.S. workers belonged to a union in 1983. Labor contracts typically provided cost-of-living adjustments tied to inflation. And competition for workers meant those union pay increases helped push up income for non-union workers, too.

Last year, just 12 percent of U.S. workers belonged to unions. And among union members, a majority now work for the government, not private companies. Wages of government workers are under assault as state governments and the federal government seek to cut spending and narrow gaping budget deficits.

Workers' average weekly wages, adjusted for inflation, fell in February to $351.89. It was the third drop in four months.

Kellogg, which makes Frosted Flakes and Pop Tarts, is increasing prices power balanceon some products to offset costlier ingredients. Kellogg is responding to soaring costs for commodities including wheat, corn, sugar, cotton, beef and pork.

Vickens Moscova, a self-employed marketer in Elizabeth, N.J., says he's paying more for staples like cereal, bread, eggs and public transportation. Yet he's making little from his savings.

"It is a huge pinch," says Moscova, 25.

Though higher gasoline and food prices may lift the inflation rate in coming months, the Fed says it doesn't think inflation will pose a long-term threat to the economy. The central bank projects that inflation won't exceed 1.7 percent this year.

But if oil prices, now around $101 a barrel, were to go much higher, economists say heavier fuel bills would cause people and consumers to cut back spending on cars, appliances and other items.

Another recession would be possible if prices began to approach $150 a barrel. Back in 1983, a barrel of oil cost just $29.40 — or $65 in today's prices, adjusted for inflation.