I continue to be concerned that oil prices will increase in 2011 at an unanticipated rate. This could dampen the economic recovery and begin to force badly needed structural changes in the US economy like a serious move toward fuel efficient cars and regional agricultural systems.
Core inflation in the US continues to trend toward zero while food and energy prices are increasing at a pace worth noticing.
This quote from today's WSJ sums things up:
"With gasoline already at $3 a gallon it is more a threat to economic growth than it is a sign of inflation."
Evans, Kelly, 2011. Oil's rise is a sticky situation for recovery. The Wall Street Journal, Jan. 12.
I see energy issues as paramount to the future of US economic growth. Moves toward regional agricultural systems are badly needed.
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