Though it's a wealthy state, Maryland can't escape these headwinds. Sales tax collections last month - for purchases rung up in December - were "surprisingly weak" because people pulled back on spending, state Comptroller Peter Franchot told Maryland leaders in a letter this month.
Good will prospers
Sales rose strongly for at least one operation this month: Goodwill Industries of the Chesapeake, which has thrift stores across the region, "had a fabulous February," said Phil Holmes, vice president of public policy and development.
Some economists are worried about stagflation, that nasty mix of economic weakness and soaring costs that marked the 1970s. But Irons thinks the country's current slowdown will also slow companies' ability to pass their expenses on to consumers.
Ned Atwater, owner of the Atwater's bakery stores in Baltimore and Towson, wants to avoid price increases as long as possible. Bread at his company ranges from $1 to $4.50 a loaf, and he's concerned that $5 might be a thanks-but-no-thanks threshold for buyers.
But his monthly flour bill is now $15,400 - double what it was for the same quantity at the start of last year. Two weeks ago, the company discontinued its wholesale business, which has tighter margins than retail, because the math no longer worked.
"We buy directly from a certified organic mill," Atwater said. "Usually we just place the order and they fill it. This time, they faxed us the invoice because they were sure that we were going to be shocked at the rising prices."
Irons blames the increase in food costs mainly on the rising price of oil, necessary for farming and shipping. Analysts think the fuel situation won't get any better - auto club AAA says the annual spring run-up could bring $4-a-gallon prices.
Windsor Mill resident Minnie Lewis, 65, has already had it. She and her husband are thinking of selling the Ford F-150 pickup they bought in 2004 because it's not fuel-efficient enough. Their drives on scenic routes through Pennsylvania have been cut from once a week to once a month.
To save money, Lewis has also started clipping coupons, doing no more than one load of laundry every two weeks and wearing an extra layer of clothing around the house to keep the thermostat set lower.
"When you see that everything is going up, you need to look within your budget to see what you can do to cut," said Lewis, a retired claims examiner for the Social Security Administration. "Some people, they see it but they don't prepare for it, and then all of a sudden, it's overwhelming."
jamie.smith.hopkins@baltsun.com eileen.ambrose@baltsun.com laura.mccandlish@baltsun.com
Sun reporter Liz F. Kay contributed to this article.
