Rising costs worry businesses in U.S.

At Joe's Coffee in New York, owner Jonathan Rubinstein feels inflation brewing:

"Coffee prices have gone through the roof," said Rubinstein.

Consumer prices took a bigger than expected jump in Jan., reports CBS News correspondent Anthony Mason.

"Well's there a little whiff of inflation," said Stuart Hoffman, senior vice president and chief economist for The PNC Financial Services Group. "But it mostly smelled like gasoline."

Gas prices have spiked 22 percent in just the past six months. During the recession, the inflation rate fell to its lowest levels in decades:

"Core inflation remains quite low, but it is beginning to rise," said Dean Maki of Barclays Capital.

With the winter frost damaging crops, food prices had their biggest spike in January in more than two years.

At Katz's deli in New York, manager Jake Dell Says it's cutting into profits.

"Every single one of our costs have gone up at least 2 percent. Some as high as 12 percent. That's a ridiculously high increase," said Jake Dell of Katz's Deli.

Unfortunately, costs may be passed on to customers.

In the wake of the recession, many businesses have been afraid any price increase may scare off customers. But at Joe's, Jonathan Rubenstein can't wait any longer.

"Next week for the first time in two years, we are raising our prices," said Rubinstein.

A cup of drip coffee at Joe's six stores will go up 10 cents or 5 percent. Nationally, Smuckers, owner of Folgers Coffee and Dunkin' Donuts says it will hike prices of coffee products 10 percent. If inflation worsens, it could hold back the economy:

"If we don't see any jobs growth over the next six months or 9 months as gasoline and other prices rise, that would be a double whammy," said Stuart Hoffman, economist at PNC Bank.

But many economists believe the job market and wages will begin to pick up soon, which should offset the impact of inflation.

  • Anthony Mason
    Anthony Mason

    CBS News senior business and economics correspondent; Co-host, "CBS This Morning: Saturday"