ANALYSIS

NEW YORK — With Clorox Co. and FedEx Corp. announcing big price increases, business executives wringing their hands about sharply higher costs and Federal Reserve officials openly discussing their pricing concerns, inflation suddenly seems to be public enemy No. 1.

But it's probably worth taking a breath or two before declaring the economy to be in big trouble. For starters, the Fed is dealing with inflation by continuing to raise interest rates. Plus, history shows that price surges after natural disasters like Hurricane Katrina rarely stay for long.

Of course, such a sanguine outlook might be hard to comprehend given the current evidence to the contrary. While energy and other commodity prices have risen significantly in recent years, the gains accelerated following Katrina. Now, they appear to be trickling into other parts of the economy. As businesses get saddled with those higher costs, the big concern is that consumers may soon see increasing prices all around.

Just in recent days, household products maker Clorox, maker of its namesake bleach as well as Glad bags and Kingsford charcoal, said it would raise prices to counter the increase in its commodity costs. FedEx plans to boost rates on air shipments by the largest percentage in at least nine years.

Those announcements came as the Institute of Supply Management's monthly survey found that growth in the service sector slowed dramatically in September while prices companies paid rose sharply, especially for those working in theagriculture, legal services, utilities, construction and public administration industries.

The group's index of prices paid rose 14.3 percentage points to 81.4 percent, the biggest jump and the highest level for the index in the eight-year history of the report.

With inflation creeping into the broader economy, Fed officials are being surprisingly blunt about their concerns. Their recent frankness suggests they will continue to raise interest rates to hold down inflationary pressures even if it puts economic growth at risk.

Fed policymakers last month lifted a key interest rate, called the federal funds rate, by one-quarter percentage point to 3.75 percent. It marked the 11th quarter-point increase since the Fed began to tighten credit in June 2004.

Last week, Richard Fisher, the president of Federal Reserve Bank of Dallas, warned that inflation is near the "upper end" of the Fed's target range. William Poole, president of the St. Louis Fed, said he had no doubt that the Fed "would respond to surprises in core inflation that seemed likely to be persistent and to indicate a developing inflation problem."

And Anthony Santomero, the president of the Philadelphia Federal Reserve Bank, indicated that the Fed will have to keep moving interest rates higher to keep these temporary price increases from sticking.

"Until recently, investors generally assumed that soaring energy prices wouldn't upset Fed policymakers as long as core inflation remained subdued, which it has until now," said Edward Yardeni, chief investment strategist at money-manager Oak Associates Ltd. "Of course, the best way to make sure that energy costs don't drive up core inflation is to raise interest rates high enough to bring energy prices back down, or at least stop them from going any higher."

Still, there could be reason to think that all the inflation worries could be a bit overdone. Economists at Merrill Lynch looked back to the eight natural disasters since the late 1980s that spurred a run-up in inflation. What they found was on seven occasions, core inflation — which strips out energy and food costs — was actually lower a year later and on five occasions the overall inflation rate, as measured by the consumer price index, fell as well.

The coming months will test the Fed's inflation-fighting resolve.