Inflation Soars. Stagflation & Recession Are Here Now, Too.

Inflation is high. Economic growth is negative. Except for the low unemployment rate, we are in the worst of times.

The U.S. government just announced that overall prices increased by 1.3% from May to June. That means inflation in the last 12 months has reached 9.1% — another 40-year high.

As I’ve noted in previous Newsmax columns, inflation could reach near double-digit levels by the end of the summer.
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Since the economy is shrinking or receding, regardless of what a government agency says, we are in a recession.

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The next bit of disturbing news will come in about two weeks. When the Federal Reserve meets at the end of the month, as noted in previous columns, the Fed will raise interest rates at least 75 basis points — and perhaps as much as 100 basis points.

A day or so later, the government will announce its first estimate for gross domestic product (GDP) growth in the second quarter. That number will be negative, perhaps as much as -2.5%. That will be the second consecutive quarter of negative growth in GDP, following the revised -1.6% for the first quarter — which is the classic definition of a recession.

The National Bureau of Economic Research (NBER) is the government’s agency that officially declares a recession. It will undoubtedly note that since the unemployment rate is less than 4%, a recession does not officially exist.

Job Opportunities to Dry Up

The only reason the unemployment rate remains low is because there is a labor shortage. There are currently more than 11 million job openings and less than 6 million unemployed Americans. Within the next few months, however, the number of open jobs will fall dramatically.

Since the economy is shrinking or receding, regardless of what a government agency says, we are in a recession.

Even if the NBER says we are not in recession, it will have to admit that the economy is stagnant, which means it is not growing. When we experience a stagnant economy with rapid inflation, we call that stagflation, and there is no denying that stagflation is present.