As imports make up a significant portion of the goods we buy, the direction of their prices helps determine where inflation may be going, says economist Joel Naroff. Right now, there is no reason to even give inflation a thought.

Yes, oil costs soared in March, but the price of just about everything else we imported was down. Food, non-oil industrial supplies, consumer goods and motor vehicles all posted negative numbers. The stronger dollar and weak U.S. economy helped. Why the same cut back in demand didn't lead to drop in petroleum is something I will leave to Oliver Stone. As for exports, until last summer, the farm sector had been raking in the loot from soaring export prices. That is no longer the case. Indeed, export prices are now on a major downward trajectory and the year-over-year drop in agricultural export prices was the largest since the data started to be released in March 1985.

Except for energy, which operates under its own laws of economics, consumers are not likely to be seeing much in the way of inflation for quite a while. The weak economy and firmer dollar are keeping import costs down. So, does that mean we are in for a bout of deflation? Doubtful. The dollar is not likely to continue its upward surge and once growth starts to resume, a lot of the price incentives and cutting that is going on will disappear. With all the liquidity in the system, a year from now we are more likely to be concerned about inflation.

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