Stagflation Ahead (Thanks, Trump!)

 

America's Golden Age under con artist and oft- bankrupted business genius Donald J. Trump will be arriving with a vengeance:

It’s a strange time for the US economy. Prices are rising, jobs growth has stalled, uncertainty is everywhere and stock markets have soared to record highs. Against this background a scary word last used in the 1970s is being uttered again: stagflation.

Stagflation is the term that describes “stagnant” growth combined with “inflation” of prices. It means that companies are producing and hiring less, but prices are still going up. It’s a scenario that some economists say can be worse than a recession.

The last time the US saw a period of prolonged stagflation was in the 1970s during the oil shock crisis. Higher oil prices caused inflation to rise, while unemployment rose as consumers cut back on spending.

For now, the US economy isn’t experiencing stagflation, but recent data has shown it is edging closer to it.

After Donald Trump’s tariffs were announced in the spring, official data initially suggested the economy was shaking them off. New jobs were being added to the economy at a stable pace, while inflation went down to 2.3% – the lowest it had been since 2021.

However, when new labor market data was released in August, it became clear that there had been an impact on hiring that had been slow to appear in the data. Initial job figures for May and June were revised down by 258,000. While figures in July and August were slightly stronger, it was still a marked drop compared with earlier in the year.

Meanwhile, inflation started crawling back up in April. In August, the annualized inflation rate hit 2.9%, the highest since January. [snip]

Economists are pointing to two policies coming out of the White House that are pushing the economy closer toward stagflation.

Trump’s crackdown on immigration has cut down the number of available workers and also increased the cost of hiring. And when it comes to prices, tariffs have just started to have a noticeable impact as companies pass tariff costs on to consumers...

The boneheaded incompetence of the Malignant Fascist and his coddling toadies, with decades of countervailing evidence of the destructiveness of their economic and monetary policies notwithstanding, means America is likely to have a repeat of the '70s stagflation that those of us of a certain age remember well.  Today's stagflation is entirely self- inflicted by the wrongheaded, late 19th Century beliefs of the Malignant Fascist and his bone- deep racism and anti- immigrant prejudices. 

We could easily have used the "I did that!" meme to head this post, but we decided against because credit for our ongoing catastrophe should be shared by everyone who voted for this.

(Gif:  our exalted Philosopher King)