Many economists are pointing towards the price of oil as a sign of economic recovery.  While it is true that higher oil prices are a sign of recovery we must not forget the massive impact that Chinese stimulus is having on oil prices as well as the long-term potential negative consumer impact due to higher oil.  The Economist writes:

THE price of oil reached over $60 a barrel during intraday trading on Wednesday May 13th, its highest point since November. Glimmers of economic recovery, such as an increase in imports from China, together with a weak dollar and tight supply forecasts have pushed up the prices of many commodities. Coffee, sugar and wheat have all hit modest peaks this week. Exporters of commodities would welcome an upturn in prices for food and other raw materials and those worried by deflation might also cheer rising prices. But consumers already battered by the economic slump, especially in poor countries, will not be pleased by rising costs.

Regular readers know that I believe most of our issues lie in the hands of the U.S. consumer.  Anything that deters the U.S. consumer from being able to save more and spend less will only prolong eventual recovery.