The Economy: Will inflation strike in 2010? Watch the July 31 GDP report.
Selling: E-mail marketing is getting more sophisticated ... and popular.
Stimulus Timing: The trickle will become a stream by Labor Day.

The Economy
Inflation will tick slightly higher than expected this year, to 1.5%, after essentially no price increases last year. A temporary spike in oil prices is behind our new forecast, though the increase in energy costs won’t seep into prices for other goods and services.
By Labor Day, the upward push will ease, with oil prices peaking near $85 a barrel in July. Most other prices are falling or rising only a bit. Even increases in medical costs are moderate ... except for Rx drugs. Plus the weaker dollar isn’t padding import costs, and until the economy starts to rev up, wage gains are likely to be scarce.

The bigger concern: Inflation next year, as the economy starts to pick up some steam and the ballooning federal deficit and its potential to stoke long-term interest rates move to the forefront. In fact, the latest run-up in long-term rates was driven by worried bond investors. They’re not convinced by Federal Reserve chief Ben Bernanke’s vow not to tolerate higher inflation in 2010.

The fact is, the Fed is in a bind. 30-year fixed mortgage rates have jumped from 4.8% to 5.4% since mid-May. Any higher ... the recent home sales pickup will stall.
The policymakers could buy more Treasuries, aiming to keep long-term rates from rising any further, and maybe even helping to nudge them down a skosh.
But that’s a double-edged sword: The move could fuel inflation fears, the opposite of what’s intended. That would wind up driving rates higher.
Stuck in this jam, the Fed will leave well enough alone and, when it meets on June 23-24, will reassure investors that it remains vigilant against inflation.

The next GDP report ... on July 31 ... warrants a closer look.
There’ll be more details on spending, sales and production ... helpful info added as the result of a Commerce Dept. review conducted every five years. There are new categories, such as food eaten at restaurants, which accounts for 40% of overall food spending. Also, broad categories, such as consumer electronics, are broken down to show sales of specific items, such as TVs, PCs, and cameras. Private firms will collect more data. For more info, go to www.bea.gov/national.

Selling
Flat back-to-school spending again this year ... no change since 2007.
No splurging on fads, despite pent-up demand. Consumers will scale back, especially in electronics, but also in shoes, clothing, and other back-to-school buys. Kids might get a new cell phone, not a laptop ... two pairs of jeans, rather than four.

The rapid sales growth in cheaper private-label goods is likely to last.
Store brand sales will jump about 10% in 2009, the same as last year, while name brands could end the year down a little. When the recession ends, shoppers won’t stop being frugal ... they like the quality as well as the lower prices found at drugstores, dollar stores, warehouse clubs, mass merchandisers, and supermarkets. Private-label products, which nabbed another percentage point in market share over the last year, now make up 15%-18% of total supermarket sales.

E-mail marketing and advertising ... rising 8%-9% a year through 2013. E-mail service providers will gain from the focus on the low cost medium ... especially firms such as Experian and Epsilon, which help marketers develop targeted messages that don’t get buried in the huge volume of marketing e-mails. Messages can be segmented by buying patterns, geography, and/or demographics. Why do companies like e-mail marketing? It’s cheap, and results are measurable.

Stimulus Timing
The trickle of stimulus funds is becoming a steady stream. By Labor Day ... about $125 billion will have been committed to various transportation, health care, housing, education, energy, water and other projects across the U.S. By Thanksgiving ... about half of the $500-billion pot available for spending.
Projects in the works are many and varied:

• Wastewater treatment in California
• Weatherization of federal courthouses in Akron, Ohio; Scranton, Pa.; Boston; and elsewhere
• Wind power projects in Montana
• Low income public housing in Cleveland; Burlington, Vt;, and Lexington, Ky., among other communities.

The White House is pressuring governors to speed up approvals. But ... By the time a lot of the money is spent, the economy may be on the mend.

That’s bound to provoke harsh criticism from Republicans and others who said the economy would recover without Uncle Sam’s costly shot in the arm.
But the stimulus package was never meant to be a flash flood. Tax cuts are being doled out week by week. Spending initiatives stretch out over two years.
And the truth is, no one can know if it was needed. Without a redo button, it’s impossible to tell whether the recession would have faded away on its own.