The rises in import prices will likely speed up the process of companies' passing on such rises to domestic prices.
The shrinking trade balance isn't a bad thing because it's partly a result of strong domestic demand. Given that domestic demand is driving the economy, the rise in oil prices alone isn't enough to derail growth.
Domestic demand is clearly the driving force. With strong capital spending plans and signs of rising bonuses, there's a good chance that the economy will grow more than an annualized 2 percent in the fourth quarter.
For the economic recovery to be sustainable, domestic demand needs to strengthen and the consumer prices need to show consistent gains. Both of these factors are most directly influenced by wages.