Never mind inflation. Producer prices are barely budging -- up 0.3 percent last month after a 0.6 percent drop in September -- and industrial production slowed in October, with manufacturing falling for the first time in four months. What does that all mean? It means that Ben Bernanke has every incentive to keep interest rates low for the foreseeable future, as weak demand and stalling production are mitigating any inflationary temptation that would require a tightening of monetary policy.
There is a debate going on about whether we're going to have a jobless or "job-full" recovery. I'm a natural optimist, but I can't see the job-full argument. The economy has to grow about 2.5 percent a year to soak up the 100,000 people entering the job market every month. A fitful recovery like today's news presages will hardly be able to maintain 3 percent growth for the year. I'll parse the jobless recovery debate in greater depth later today.