Mainstream media now acknowledges stagflation

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The U.S. economy might be out of the frying pan and into the fire. After months—even years—of planning for a recession, the country may find itself facing a different sort of calamity: stagflation.

fortune.com/2024/04/26/inflation-stagflation-ubs-economy-federal-reserve-jerome-powell-unemployment-recession/

For the past few years, the US economy has been growing at a pace that seemed too good to be true.

So, at first glance, Thursday’s gross domestic product report showing the US economy grew at an annualized rate of 1.6% in the first quarter of this year versus the 3.4% rate in the fourth quarter of last year seems to be just the medicine the Federal Reserve doctors ordered. But there’s just one problem: inflation.

The latest Consumer Price Index data shows inflation is rising, moving further away from the Fed’s 2% target. And economists are forecasting new inflation data due Friday will paint a similar picture. The GDP report gave another preview of what could come.

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Included in the report was an update on inflation from the prior quarter, as measured by the Fed’s preferred gauge, the Personal Consumption Expenditures price index. The latest data showed prices ticked up to a 3.4% annualized rate in the first quarter compared to 1.8% in the last quarter of 2023.

Slowing economic growth combined with rising inflation is known as stagflation. It’s among the ugliest terms to central bankers.

edition.cnn.com/2024/04/25/economy/stagflation-us-economy-gdp/index.html

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