1) Doing a retail specific story looking at retailers and how they are passing the rising prices to consumers, and or if they are providing incentives to increase demand and thereby prices.

2) Looking at restaurants and analyzing if rising food prices are forcing owners to increase pricing on the menu, although this time the food inflation growth was marginal.

3) Look at how China could benefit with its low cost goods versus the ricing prices of goods in the U.S., if the CPI continues to tick up.

1) A simple chart showing the correlation between inflation and personal income over the last ten years, which would highlight the pre-crisis and post-crisis scenario.

2) A map comparing CPI in the G-20 countries, will give the story a global edge.  t will also provide a good relative context.

Without words, the story can be illustrated using a info-graphic which shows what a American consumer was paying last month versus in Jan 2013. It could also include how much he/she was earning. Other data points in the info-graphic can be unemployment rate, personal spending, personal income. And an insert on Fed asset buying trends.

While a controlled inflation may be a good sign for the U.S. economy, it’s too early to start the party. The increase in prices is hurting wallets. Paychecks are not increasing relative to prices, with hourly earnings adjusted for inflation falling 0.6 percent.

As the Fed keeps pouring money in the economy through asset purchases, a real recovery will only happen when jobs are created and Americans earn wages enough to deal with rising prices. Although the price increase right now is a not a huge concern, it might inflate into a bigger threat as Bernanke pumps them monetary system with his economic stimulus plans which may push inflation beyond 2 percent.

The central bank will continue its asset buying till the labor market sees a “substantial improvement,” the Fed said in its release of the Jan.29-30 meeting minutes. Unemployment rate in February fell to 7.7 percent to 7.9 percent, the labor department said earlier this month. No one knows though what the Fed views as substantial and all Americans can do right now is wait and watch.

For starters, the central bank by way of buying assets, read long-term securities, is pumping money into the system. An excess of money supply will drive prices higher, which is known as inflation. There is an on-going debate whether the Fed should risk rising inflation and continue to pour more dollars in the economy.

John H. Cochrane, a finance professor at the University of Chicago Booth School of Business, and blogger at The Grumpy Economists says “Inflation should be feared.”

“While preventing deflation in the recession was vital, the idea that a deliberate inflation is the key out of our policy-induced doldrums makes no sense.”

 “The fact is, the Fed is basically powerless to create more inflation right now — or to do anything about growth. Interest rates can’t go below zero, and buying one kind of bond while selling another has minuscule effects. Which is just as well.”

While, we could play the devil’s advocate here, there is no denying that the Fed’s actions to spur growth in the economy have borne fruit. John Authers of the Financial Times echoes this sentiment.

“We should all be looking at inflation expectations. Central bankers do so all the time, as they tend to be self-fulfilling. It is when people expect higher inflation in future that they demand higher wages, and inflation becomes entrenched.”

“The Fed’s drastic action to avert deflation has successfully brought US inflation expectations back where they were for much of the last decade. At about 2.5 per cent, 10-year expectations remain below post-crisis highs.”

 The relation between central banks and inflation is not a topic of discussion only in U.S. It’s a world-wide phenomenon. Economist Paul Krugman analyses how Japan recovered from a slow growth with Prime Minister Shinzo Abe driving the country out of deflation.

“While doomsayers keep predicting a fiscal crisis in Japan, hyping each uptick in interest rates as a sign of the imminent apocalypse, it keeps not happening: Japan’s government can still borrow long term at a rate of less than 1 percent. Enter Mr. Abe, who has been pressuring the Bank of Japan into seeking higher inflation — in effect, helping to inflate away part of the government’s debt — and has also just announced a large new program of fiscal stimulus. How have the market gods responded?

The answer is, it’s all good.”

Some believe these numbers will prompt the Fed to continue its asset buying program and the inflation target is well under the central bank’s limit.

The data should not be a concern for the Fed right now, Stephen Stanley, chief economist at Pierpont Securities, told Reuters.  Recent data should give Bernanke a lot of time to keep the unemployment in check, Stanley says. While the Markit group’s chief economist, Chris Williamson believes the rise in the CPI “will jangle some nerves at the Fed.”

The Wall Street Journal writes the rise in CPI is temporarily increasing inflationary pressures, and would give the Fed more leeway for more economic stimulus.

Stocks in the U.S. were set to open flat, post the data release, after the S&P 500 reached historic highs this week.

Rising tensions in Iran and the surrounding countries have pushed gas prices in the US to the highest levels since September 2011.

The AAA Oil Company reported the national average price for a gallon of regular unleaded gasoline at $3.767, an increase by about three-tenths of a cent. The increase is the twenty-seventh consecutive increase.

The gas prices have increased by 14.88% in 2012 to this point. Compared to the record high prices in July 2008, this is an 8.43% decrease, which means prices are down by 34.7 cents.

Geopolitical factors are said to be the main drivers behind this growth. Iran’s threat of closing down the Strait of Hormuz has increased speculations over oil supplies in the months to come.

Iran is one of the largest producers of oil and the Strait of Hormuz has huge supplies of natural gas reserves which makes the Strait a very important factor in global oil supplies.

Economists believe that this speculative sentiment is largely affecting global oil prices.

“Nobody knows whether there will be a war or not, but that is driving the prices,” said Phil Flynn, Vice President and Energy Analyst at PFG Best.

According to Flynn, the market has a probability of conflict at this point. The current oil prices also reflect a risk premium of around $10 – $20 per barrel he said. Oil prices ended at $106.72 per barrel as of end of day today on NYMEX.

The market also fears that if Israel goes to war with Iran over Tehran’s nuclear program, oil prices would further rise by $5 – $10 per barrel.

However, the American consumers are not yet feeling the pinch. Despite rising gas prices, the auto sales for February witnessed an increase of around 40%.

“The impact of the high gas prices has not been felt much,” said Mark Vitner, senior economist at Wells Fargo. Vitner believes that the impact of the current rise would be felt with a lag of around five to six months.

With American economy showing positive signs of growth the current increase in gas prices is off set by the increasing personal incomes and creation of jobs across the country. However, if the prices continue to grow at this pace due to tension in the Middle East, the future could be bleak.

“If the prices cross $4.50 per gallon, that’s when will really start to have adverse effects,” said Brett Ryan, US economist at Deutsche Bank.

According to Ryan, gas prices in US usually follow a specific patter. They increase at the beginning of the year, flatten toward md-year and then decrease around year- end.

He forecasts that gas prices might peak up to $4.10 around May and June and then start their downward slide, in a stable scenario.

As long as consumer sentiment is positive, Ryan thinks that the current situation is not unhealthy.

“Its not as bad as people think,” he said.