Despite all the worry over the impact of rising oil prices, recall that the U.S. is now a largely services-based economy. And observe that the rising wages that have led to real overall cost rises in decades past are nowhere to be found today. Exhibit A is in Wisconsin.
Amid a bounce back in manufacturing activity, surging commodity prices are leading to fears of inflationary forces. Those forces are real, but corporate profits -- and therefore, stock prices -- won't suffer too quickly. The pain for struggling Americans, though, could be rapid and severe.
A further 18% overall profit increase this year, in an economy facing numerous challenges both domestically and overseas? Don't count on it.
