MiamiHerald / In the litany of explanations for the stock market downdraft, the return of inflation is one that deserves the attention of long-term investors.

For years, almost a decade now, the worry about consumer inflation has concentrated on the risk of falling prices. Now, with the January jobs report showing average hourly wages growing 2.9 percent, suddenly rapidly rising prices is the worry.

In the week ahead, that worry will be put to the test with the release of the January Consumer Price Index on Wednesday.

It’s important to note that inflation is not a higher price for avocados at the grocery store, or paying $1,000 for the newest iPhone. It isn’t the cost to see a doctor or what you pay for a haircut. Inflation is all those and more. Inflation is the general rise in overall prices over time. Quickly rising prices are dangerous for an economy, just as are rapidly falling prices. The Federal Reserve’s goal is a steady average of 2 percent inflation. Except that it has been coming up short for years, until now — or at least that is the worry on Wall Street.


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