[Ronzo]

"Those higher prices at the producer and wholesale level are not getting passed along to the consumer," he continued. "Those companies are letting those costs eat into their profits, which they're gaining back from high productivity."

They don't seem to have any problem passing on the high price of commodities at my gas station!

However, the high commodity costs are not a good sign...as costs go up, either prices go up or costs are cut in other areas, like employment. This would help to explain the lack of expansion in employment, which is still a major concern.

However, it's better that prices go up than down. I don't know any economist who thinks deflation is a good thing.

[sixmil]

However, it's better that prices go up than down. I don't know any economist who thinks deflation is a good thing.

On the flip side, I don't think inflation is any better. The stable monetary policy we have had for the last decade has been great, although it slightly favors inflation (read money borrowers). I know money borrowing is a necessity, but I don't think it needs to be subsidized.