Do rising gas prices threaten the recovery?

I think I’m in the minority among RetailWire panelists in discussing the effect of rising gas prices upon economic recovery. My contrarian view is that some inflation is reflective of higher demand…a good thing. I think we have more to worry about other rising commodity costs and their ripple effect on retail prices:

If gas prices hover at $4 or below (let’s hope not), the economic recovery can withstand it. In fact, you can make a case that rising demand for energy is a sign of economic health. It’s all about the drop in unemployment…if and when it starts to happen. There is going to be just as much inflationary pressure based on the cost of raw materials — in particular, cotton and other commodity prices have already spiked dramatically and it’s only a matter of time before wholesale costs convert to higher retail prices. The question for 2011 is whether the apparent rise in discretionary spending on apparel will continue in light of these higher commodity prices.


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