TODAY’S ECONOMIC NEWS….The news on the inflation front is good, though perhaps temporarily:

The better-than-expected report from the Labor Department today showed that inflation was at its mildest level in six months, with prices for transportation and apparel falling while those for other goods increased only modestly.

….The relief from inflation may be short-lived: Energy prices declined in February, according to the government’s measurements, but in recent days the cost of crude oil has surged to a record of around $110 a barrel, and gasoline was tracking that to new highs at the pump.

Presumably this means the Fed can continue lowering interest rates without worrying too much about short-term inflation. Long-term inflation still seems like a problem, but for now I’ll take what I can get. On the other hand, this is unalloyed bad news:

Bear Stearns, facing a grave liquidity crisis, reached out to JPMorgan on Friday for a short-term financial lifeline and now faces the prospect of the end of its 85-year run as an independent investment bank.

….The rescue plan represents a devastating if not ultimately final blow for Bear Stearns, a scrappy and until now resilient investment bank that carved out a niche for itself by mastering the intricacies of the United States mortgage market.

The Bear Stearns situation might be unique: a mid-size firm with higher than average exposure to the subprime market. So maybe this isn’t a harbinger. Maybe.