Growth remains strong and inflation modest.
And there seems to be no shock on the horizon big enough to cause a recession. Inflation, however, is starting to show some early glimmerings. So far, this rise has not shown up in the core inflation rate. Eventually, oil will seep into the core price index as well, but petroleum does not play nearly as large a role in the U.S. economy as it did 25 years ago when the first OPEC shock was felt. If fringe-benefit costs continue to rise, inflation could worry the Federal Reserve even more.