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Joe Sundeman, an analyst at Schaeffer's Investment Research, said that the market had rallied sharply on recent job reports that suggested inflation remained largely in check.
Despite a dip on Friday, stocks rallied last week and the three major market gauges rose as oil prices fell and government reports suggested inflation was dormant.
Consumer prices suggested inflation was picking up, and jobless claims rose, defying hopes that the nation's high unemployment rate might slide.
Even as the Labor Department's numbers suggested inflation was under control, some economists said that was only because high unemployment and unused factory capacity had kept inflationary pressures in check.
THE steady flow of reminders to keep tires at the automaker's suggested inflation levels — even President Obama chimed in — demonstrates just how far the demands of auto maintenance have diminished.
"At this point, moving to a 2 percent target would not be such a giant step," said Kenneth Rogoff, a Harvard economist who has suggested inflation targeting in the United States as well as in Japan.
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Fed projections suggest inflation is unlikely to top 2% soon (see chart 2).
But most other prices were steady, suggesting inflation was not spreading through the economy.
This combination suggests inflation could run out of control if left unchecked.
"Double-dip recession, weak money supply and anaemic earnings growth suggests inflation will tumble into 2013," he said.
A gauge of prices in the report registered no change, suggesting inflation in the United States was largely tame.
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