Yet another legacy of the Bush reign

Stagflation.

WASHINGTON — Consumer prices jumped 0.6 percent in March, the biggest inflation surge in five months, as the costs of energy, clothing and airline fares all rose sharply.

The Labor Department said last month's increase in the Consumer Price Index, the most closely watched inflation gauge, followed a 0.4 percent rise in February and left consumer inflation rising at an annual rate of 4.3 percent in the first three months of this year. That was a full percentage point above the 3.3 percent rise in prices for all of 2004.

The new report showed that even outside of food and energy, there were significant price pressures last month. The so-called core rate of inflation rose by a worrisome 0.4 percent in March, the largest jump in 2 1/2 years and double what economists had expected. It reflected higher prices for clothing, hotel rooms, airline tickets and medical care.

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The higher inflation pressures are coming at a time when a number of reports in recent weeks have shown economic weakness, from a disappointing employment rise in March to lower-than-expected retail sales.

"We are getting slower growth and higher inflation numbers. The Fed is caught," said David Wyss, chief economist at Standard & Poor's in New York. "The Fed would like to keep interest rates low to keep the economy moving but on the other hand they have to fight against inflation."

If this trend continues, as I understand it (the Vega is no economist), the Fed may very well be powerless to do anything.

Question: Has George W. Bush presided over two economic downturns, or was it just one punctuated by a brief, illusory uptick?