Despite today's data, and separate reports of rising inflation in China and Europe, Bernanke is right to resist the temptation to tighten policy, says David Levy, chairman of the Jerome Levy Forecasting Center.
"It's still fair to say we're in the midst of a dis-inflationary not an inflationary trend," Levy says. "If wages are not growing very fast — and they're growing more and more slowly — then the ability of people to pay those process is simply not there."
"I'm not minimizing the impact [but] it's very different from starting an inflationary process," he says. "An upward blip [in inflation] is very different from an upward blip which is telling us we're going up more and more; that's what the Fed has to worry about. "