As bad as you think the economy is now, it’s nowhere near as bad as it was in the 1970s

Bob Riha, Jr./Archive Photos/Getty Images/File

Vehicles line up for gasoline at a service station during a gas shortage on May 3, 1979 in Long Beach, California.


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Last month when the new GDP figures showed American economic growth Slowing down from recent gangbuster levels, many have diagnosed the economy with a much uglier disease: stagnation.

symptoms stagnation These include (but are not limited to) stagnant economic growth coupled with rising inflation. So Ugly inflation report for MarchAn unexpected rise in the pace of inflation and a lackluster GDP report made the diagnosis seem like a no-brainer.

Even JPMorgan Chase CEO Jamie Dimon said last month that the U.S. economy „looks more like the 1970s than we’ve seen before” and that the risk of stagnation is growing.

But Federal Reserve Chairman Jerome Powell said any positive stagnation tests were false positives. „I don’t see the stake or the 'flation,” he said told reporters Fed officials voted to leave interest rates unchanged at a press conference earlier this month.

„I’ve been around stagflation. It’s 10% unemployment. It’s high single-digit inflation and very slow growth,” he added, referring to stagnation after oil prices spiked during the Arab oil embargo in the 1970s.

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I, being a General General, cannot directly speak of that period. However I agree with Powell – the US economy is not experiencing stagnation. However, it can experience a different, much less serious condition: depression.

If you’ve never heard that term before, there’s a good reason—I coined it myself.

Slack inflation is such a bothersome condition that if you text your mom about it, she’ll probably tell you to go to the ER. Then, you ignore her advice and it either goes away on its own or it gets much worse.

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To use more economic lingo, slackflation is when inflation is sticky — but out of control — and the economy is in recession (nothing to do with a messaging app that has an incredible collection of emojis).

A recession, which unfortunately I can’t take any credit for, describes in detail a situation where the economy isn’t doing well. The most widely recognized symptom of an economic recession is a rising unemployment rate.

This is happening in America According to the latest jobs report. But it’s not at levels that are cause for concern – the unemployment rate rose a tenth of a percentage point in April to 3.9% from 3.8% in March. But that may change in the future.

A worrying sign is the pace of monthly job gains It fell to 175,000 last month from 315,000 in March. But many economists agree with Chicago Fed President Austin Goolsbee, who called April’s gains „very solid.”

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On top of that, claims for unemployment benefits last week rose to their highest level since August.

But in terms of inflation, April Consumer Price Index data Wednesday’s release showed a slight improvement, with the pace of annual and monthly price increases slowing slightly.

Month-to-month movements in the country’s inflation rate are not meaningful to central bank officials. As the saying goes in finance, trend is your friend. The trend of inflation is not really friendly right now.

After months of big gains, progress toward the central bank’s 2% target appears to be stalling. However, the inflation we are experiencing now is nothing compared to the 1970s and 1980s.

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Diane Swank, chief economist at KPMG, summed it up well for me.

Unlike Powell, „most of the labor force was not born” when the American economy was in recession, and therefore „has no memory of it during their lifetime.”

At the same time, millennials dominate the workforce, „Many milestones that are very important to people are not being met.” Chief among them, he said, is buying a home — something many Americans have Delayed indefinitely Record-high home prices and painfully high mortgage rates.

„So no, it’s not the 1970s, but it’s understandable why people are still upset.”

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