Inflation is back. the government confirmed it last week, saying that consumer prices in March surged at an annualized rate of 6.2%. The news took a toll on the markets: interest rates jumped, stocks slumped. But it's hard to know why anyone was surprised. Before the announcement, prices for raw materials--from soybeans to steel--had been soaring for two years. Wholesale food prices, like those for pork bellies and grains, rose 47% during that period; metals went up 73%.
Consumers have so far been mostly shielded from the rises for a couple of reasons. There has been little rise in workers' wages,...
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