Stagflation is like an imperfect storm, a weather happening with lots of contributing factors. Stagflation is an economic condition caused by a combination of increasing inflation and high unemployment rates, which cause a decrease in consumer demand for goods and services.
In a good economy, there’s a balance, where slow steady economic growth is in step with consumer demand. With Stagflation, the economy is out of balance in a bad way.
What Does Stagflation Mean?
Stagflation occurs when high inflation happens at the same time as high unemployment. Despite recent growth in the unemployment rates, the country is still about 2 million jobs shy of employment numbers in pre-pandemic days.
