Barbara Kiviat at Time discusses the bad news.
The complementary debate on the blogosphere concerns whether the rebound is going to stick, do we have price inflation or deflation? Pricing power is very weak, yet inventory to sales is at its lowest point for the past decade. With low inventories we would expect price rises, but general deflation measures contradict that point, a puzzle. Unfortunately one way for the economy to resolve the puzzle is to go through another contraction. The other resolution to the puzzle is increased productivity to build up inventory without damaging price.
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