Why America seems destined for stagflationBy NY Post Editorial Board
July 23, 2022
The Labor Department last week reported that first-time unemployment claims hit their highest level since last November, back when the Delta variant was first giving way to Omicron. That, as inflation hit 9.1% in June, and wholesale prices surged 11.3%.
Welcome (back) to stagflation — a nasty combo that last hit under President Jimmy Carter, back when Joe Biden was a young senator.
Applications for jobless benefits for the week ending July 16 spiked to 251,000, a jump of 7,000 over the prior week. Since April, new claims have risen by 85,000 — even though, with fading COVID, you’d expect them to fall, especially since the labor-force participation rate has also fallen since March.
Add to that a sustained rise in continuing jobless claims, up 122,000 (on a non-seasonally adjusted basis) through July 9; 1,384,000 Americans are collecting unemployment. The combo (more people out of work, more people staying unemployed) strongly suggests the unemployment rate’s about to take off.
Meanwhile, real Gross Domestic Product fell in the first quarter at an annual rate of 1.6%, and the Atlanta Fed predicts another decline, perhaps even larger, for the second quarter, which ended June 30 (official word comes later this week).
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Source:
https://nypost.com/2022/07/23/why-america-seems-destined-for-stagflation/
