Gas and grocery costs are giving consumers the shakes.

Continue to 2nd paragraph We shake our heads when filling up gas tanks as the price scrolls way past what used to fill them up.

We shake our heads when a small basket of groceries produces a bill that used to buy a large basketful.

Those are the main culprits taking a bite out of our purchasing power, with ripple effects on the cost of just about everything.

Last year's dollar is now worth 96 cents, with a 4 percent average increase in the cost of all goods and services from February 2007 to February 2008, according to the U.S. Bureau of Labor Statistics. That's the fastest increase since a 5.3 percent growth in costs in 1991.

To find the blame for higher bills, start with oil. Fast-developing nations like China and India are driving demand higher.

David Denslow of UF's bureau of economic research said the oil industry is not developing new petroleum resources and technologies as fast as it was 10 years ago. He also said there's some debate about the role of speculation in oil commodities markets as investors flee stocks and housing.

Incredible shrinking dollar - Gainesville Sun - March 29, 2008