Inflation Ups & Downs: Can The Data be Trusted?

We told you earlier about the U.S. economic reports out today. Inflation is back or at least it looks that way according to the latest wholesale numbers. November's overall PPI rose to a 32 year high. But looking back at last week--the data suggested consumer inflation was tame. So--can the government's data really be trusted? Is inflation a risk or not? CNBC’s Liz Claman asked two of the nation’s most celebrated economists.

Jared Bernstein, Senior Economist at the Economic Policy Institute feels inflation is in the comfort zone.

"When numbers are jumping around I would discourage putting too much emphasis on the 1 month change. If you look at a 3 month change annualized for a consumer price index core - (without food and energy) it's 1.6%."

"I don't trust month to month spikes in (government data). But I do trust the government measurements in the longer term."

But Mike Englund, Chief Economist at Action Economics believes the Fed should sound the inflation alarm.

"We came off a very big commodity price drop (Hurricane Katrina produced a big disruption in the price indexes last year at this time) and we saw volatility in vehicle pricing, but if you look at the wider trend, you see stability coming back into these numbers."

"In 6 to 9 months, when the dust settles, the housing market will be stabilizing and we'll see inflation tracking just above the Fed's comfort zone."