The recent surge in oil and food prices has caused concern among many of us who shop for groceries and fill the car’s gas tank. Is inflation back? Gas prices have risen nearly 30 cents per gallon in the past month, and the Associated Press reported that in January food prices rose at their fastest pace since 2008. With his credibility on the line, Federal Reserve Chairman Ben Bernanke recently predicted before Congress that rising “commodity prices will lead to, at most, a temporary and relatively modest increase in U.S. consumer price inflation.”

Bernanke defends Fed policy claiming that the rise in food and energy is to be blamed on stronger demand, especially from China and other fast-growing economies, not the Fed. While U.S. consumers have watched the price of oil, corn, cotton and other necessities creep up, other prices have stagnated. Housing and wages are two powerful – and perhaps unsettling – examples.

The end of 2010 brought another round of falling housing prices and a continued weak job market. Workers have little power to demand higher pay. The Fed’s Bernanke emphasized to Congress that slow-growing or in some cases even falling, wages will keep inflation in check.

Meanwhile, several economic signs point to the beginning stages of at least a decent recovery. Payrolls, car sales, consumer confidence, retail sales and corporate profits have shown strength recently. Economists look for growth this year of around 3.5 percent to 4 percent; not stellar by past recovery standards, but progress nonetheless.