Hello, I'm Mark Pearson. More signs of an economic recovery were visible this week as America continues to watch the recession fade.
According to the Federal Reserve, U.S. consumers increased their debt load in December for the third straight month. The news included the first rise in credit card use in more than two years.
The Commerce Department reported businesses at the wholesale level increased their inventories in December even though demand for their products slowed. Economists hope increased demand will keep factories busy.
And oil prices held steady below $90 per barrel on news of larger domestic oil supplies, and – potentially – moderating socio-political conditions in Egypt. Despite the drop in crude prices, the cost of a gallon of gas rose modestly over last month. But prices at the pump are nearly 50 cents higher when compared to a year ago.
Wall Street took the week's development in stride as the Dow Jones Industrials traded in a 100-point range for most of the week closing at over 12,200 on Friday.
Congress, ever mindful of the danger posed by rising prices, summoned Federal Reserve Chairman Ben Bernanke to Capitol Hill, this week, for status report on the threat of inflation.
As food and energy prices continue to rise across the globe, critics of American agriculture have pinpointed blame at rising commodity prices. A small but vocal group has gone even further, labeling higher food costs in the third world as kindling for a string of uprisings in Asia and the Middle East.
Testifying before the House Budget committee this week, Fed Chairman Ben Bernanke took note of food and energy inflation.
Ben Bernanke, Federal Reserve Chairman: "On the inflation front, we've recently seen increases on some highly visible prices – most notably gasoline. Indeed prices of many industrial and agricultural products have risen lately largely due to the demand of fast growing market economies coupled in some cases with constraints on supply."
The two-term head of the Federal Reserve drew fire from a string of Republicans concerned about growing national debt, pending warnings of overall inflation, and the fed's monetary policy.
Rep. Paul Ryan, R-Wisconsin: "Many of us fear that our monetary policy is on a difficult track. You're going to see inflation after it's already been launched. And given that you have a huge balance sheet, given that we are basically in uncharted territory with respect to, you know, the great recession and the responses that you had to -- that you put out there, that we're going to catch it after it's too late." Ben Bernanke, Federal Reserve chairman: "It is always an issue, as you know, Mr. Chairman, that, in the recovery period, you have to pick the right moment to begin removing accommodation and taking away the punchbowl. And we, of course, face that problem, as the Central Bank always does. But we are committed to making sure that we do -- that we do it at the right time."
Bernanke also warned Republicans against playing politics with the national debt ceiling. The Obama Administration and congressional Democrats are strongly in favor of raising the U.S. debt ceiling to pay for a litany of upcoming budget demands – many requiring federal deficit spending.
The fed chair's cautious optimism that inflation would be held "at bay for the time being" did little to please Republican leadership. The Fed chief's words may do even less to quell ongoing concern over rising food prices.