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The article discusses potential obstacles to an economic recovery in the U.S. Any spike in economic growth could impel oil prices higher. Fears of inflation might push interest rates up and further harm a battered housing market. Optimists hope that economic-stimulus measures can elicit demand without driving prices up.

The article discusses inflation in the U.S. Although the U.S. Bureau of Labor Statistics is expected to report an increase in the consumer price index for November, 2009, the U.S. economy is not strong enough for vigorous inflation to take hold. Figures due from the Federal Reserve on capacity utilization for November will probably show use rates below levels some believe are necessary to keep prices from declining.

The article examines U.S. economic conditions. Retail trade statistics for October-November, 2009 indicate that consumption will continue to be steady or decline slightly as consumers remain reluctant to spend. This in turn is expected to keep the rate of inflation low. The implications of the December, 2009 consumer confidence index of the University of Michigan are considered.

The article discusses the U.S. Federal Reserve's balance sheet. Purchases of Treasury bonds, mortgage-backed securities and other instruments have caused assets held by the Fed to more than double, and increased the U.S. monetary base to almost $2 trillion. Subdued demand for loans and an unwillingness among banks to lend, though, have both kept inflation in check and impeded an economic recovery.

The article discusses the gap between actual and potential economic output in the U.S. A report to be issued in April, 2009 by the U.S. Federal Reserve could show U.S. industries to be operating at less than 70% of their capacity. Along with rising unemployment, such a production gap counteracts the inflationary tendencies of ramped-up government spending.

The article discusses inventory data in the U.S. Although inventories are expected to have fallen during November, 2008, the inventory-to-sales ratio for firms has risen to levels not seen since 2003, suggesting that inventories for many companies are still too high. An abundance of unsold goods could both keep inflation down and encourage firms to reduce payrolls.

The article discusses contradictory indicators for inflation in the U.S. The narrow spread between U.S. Treasury notes and inflation-protected securities suggests expectations for inflation are low. Conversely, the steep yield curve among Treasury notes of different maturities indicates high expectations.

The article notes reasons why the U.S. government's plan to spend $1 trillion to address an ongoing financial crisis may not be as inflationary as some expect. Commodity prices have weakened, as has the global economy. Credit markets remain constricted as many large firms seek to deleverage their balance sheets.

The article discusses inflation in the U.S. Inflation for producers likely exceeded that for consumers in July, 2008. History indicates that when the Producer Price Index reaches 7.1%, it remains high for several months. A more activist Federal Reserve Board, though, along with greatly diminished ability on the part of labor unions to win wage hikes, could produce different results.

The article discusses ramifications of economic productivity. During reasonably prosperous times, increasing productivity can boost wages without provoking inflation. Amid a weak economy, though, rising productivity can exert downward pressure on wages. A report on U.S. productivity for the second quarter of 2008 is scheduled to be released by the Bureau of Labor Statistics on August 8.

The article discusses inflation in the U.S. Sharply higher oil prices have contributed to growth in the consumer price index. However, a flaccid job market has given employers power to restrain wage increases. That, coupled with the diminishing effect of high energy prices on economic activity, could be enough to keep inflation under control.

The article discusses challenges faced by the U.S. Federal Reserve. Rising oil prices suggest the Fed may once again focus its efforts on keeping inflation under control. However, Federal Reserve Vice Chairman Donald Kohn has indicated the Fed might let both inflation and unemployment rise some, rather than risk exacerbating one by treating the other.

The article discusses inflation in the U.S. Although food and energy prices have risen, home prices continue to decline. U.S. inflation data partially account for house prices by estimating what it would cost homeowners to rent the houses they live in. Figures indicate housing affordability has been increasing.

The article examines the continuing fall in the value of the American dollar. The currency's weakness in foreign exchange has been a boon to the profit statements of multinational corporations such as Caterpillar and McDonald's, whose foreign earnings swell when expressed in U.S. dollars. This benefit is temporary, as the dollar's weakness also creates inflation which damages the U.S. economy.

The article discusses the use by economists of a core inflation rate for the U.S. that excludes prices for food and energy. The exclusion is typically justified by price volatility, but as the authors observe, other items experience wide swings in price as well. A better measure of core inflation would adjust for all undue price movements, not just those in food and energy.

The article argues that the U.S. economy may avoid stagflation. Economist Robert Brusca notes that inflation has increased prior to every recession since 1961, but then retreated in the face of reduced economic activity. The stagflation of the 1970s was caused by the U.S. Federal Reserve's overeager monetary expansion, a mistake it seems anxious not to repeat.

The article discusses economic conditions in the U.S. prior to Federal Reserve Chairman Ben Bernanke's testimony before the U.S. House Financial Services Committee on February 27. Economic growth appears to be slowing, and expectations for inflation seem to be increasing. Interest rates on long-term, fixed-rate mortgages are also rising.