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

When new gross domestic product figures last month showed US economic growth slowed from recent gangbuster levels, many people diagnosed the economy as having a really ugly sickness: stagflation.

When new gross domestic product figures last month showed US economic growth slowed from recent gangbuster levels, many people diagnosed the economy as having a really ugly sickness: stagflation. Symptoms of stagflation include (but are not limited to), stagnating economic growth combined with rising inflation. So March’s ugly inflation report, which showed an unexpected jump in the pace of price increases, and the lackluster GDP report, made the diagnosis seem like a no-brainer. Even JPMorgan Chase CEO Jamie Dimon said last month the US economy “looks more like the 1970s than we’ve seen before” and that stagflation is a growing risk. But Federal Reserve Chair Jerome Powell said any positive stagflation tests were false positives. “I don’t see the stag or the ‘flation,” he told reporters at a press conference earlier this month after Fed officials voted to leave interest rates unchanged. “I was around for stagflation. It was 10% unemployment. It was high single-digits inflation and very slow growth,” he added, referring to stagflation in the 1970s after a spike in oil prices during the Arab oil embargo. I, being a Gen Zer, can’t speak to that period firsthand. But I agree with Powell nonetheless — the US economy is not experiencing stagflation. It may, however, be experiencing a different, far less serious condition: slackflation.