Analysis, inflation scare
By Staff -- Purchasing, 7/15/1999
A late-spring run of alarming inflation reports had many (including ourselves) wondering if inflation might be making a comeback (see story on page eight of our May 31 issue). But at least two analysts--WEFA's Ronald Talley and Nicholas Neuheimer--say heightened concerns about inflation "seem groundless." While commodity prices may have stopped falling, they say, tags remain generally low. In particular, they argue that the rebound in oil prices "should be viewed more as a rebound from an extremely low level, than as the start of a sustained rise." And while the Fed remains concerned about tight labor markets, the analysts observe that labor cost increases have actually decelerated, not accelerated, in recent quarters. "While the best news on inflation may be behind us, at least for the time being, that does not mean that a sustained acceleration in prices increases is underway."
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