Unnecessary inflation fear?

There’s a brief piece on inflation via WSJ that I almost liked a lot but kind of failed toward the end.  The piece basically said, inflation need not be a worry as long as the unemployment rate remains high. A couple of points raised:

  1. When work is plentiful, employees can demand higher wages and benefits, forcing employers to boost prices of the goods and services they sell to make up the difference.
  2. A rule of thumb is that inflation doesn’t become sticky until the unemployment rate dips below 5%.

Then this part got me: inflation shouldn’t pose a problem in the near-term. Well, I don’t think anyone is worried about it in the short-term. For as long as the economy remains weak and unemployment rising, which would go on until 2010, then inflation should not be a concern.

Read it HERE.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s