The graph above is taken from the St. Louis Federal Reserve (FRED) and illustrates real final sales of domestic product. The difference between it and other measures of GDP is that it eliminates inventory fluctuations which provides considerable “noise” in GDP.
Notice the right-hand side of the graph, 2021 to present. That certainly looks flat to me, a sharp change from trend as the left-hand side of the graph from 2013 to 2019 shows. It’s quite a change.
“an economy with high unemployment and little to no growth even as prices are rising faster than normal”
Jobs report: Massive jobs surprise: US economy added 528,000 jobs in July
We were said to be in stagflation during the 1970s although unemployment did not rise above 6% at any time during the 70s.
It’s a bit difficult to compare unemployment in the 1970s with today; it’s calculated differently.
Dave Schuler: We were said to be in stagflation during the 1970s although unemployment did not rise above 6% at any time during the 70s.
1975, never below 8%
May 1975, 9.0%
https://fred.stlouisfed.org/series/UNRATE
Inflation
1974, 11%
1975, 9%
https://fred.stlouisfed.org/series/FPCPITOTLZGUSA
Negative growth through 1974 and into 1975
https://fred.stlouisfed.org/series/A191RL1Q225SBEA
UE may be calculated differently but we just had almost 600,000 jobs added and the prior months for the last year have almost all been well above 300,000. Very high job growth numbers. Also, I dont think we changed UE methods much since 2019 and we matched those numbers which were supposedly lows for the last 50-60 years.
I think you can concentrate on one set of numbers to confirm your bias if you want but if you actually look at all of the numbers it is not a clear picture.
Steve
In the early 70’s we had a very different economy. We still had a large industrial sector that dominated the US markets and some foreign markets. Japanese domination of electronics and automobiles was just beginning. Detroit still made a large majority of cars in the US. You could buy a TV, stereo or radio made in the US. There were no personal computers, and no just-in-time supply chains. Unions were much stronger, and the ethnic composition of the country was quite different than now.
China was irrelevant to everything. In 1970, the ROC in Taiwan held the Chinese seat in the UN and Security Council. The PRC had no military to speak of, no air force, no navy, no ICBM’s, a few nukes, no industry, a starving impoverished people…
The breakdown of the US education system K thru post doc, and the alienation of the Ruling Class had just begun. We still had working class families with two parents and one job.
In the early 80’s, Volker raised interest rates through the roof. We got 21% apr variable rate mortgages, and inflation was killed for a generation.
I will stick my head out and use a single data point as reflective to the health of the US economy and labor market.
Amazon employed 100,000 less employees in Q2 vs Q1 this year. Which is striking Amazon has never slimmed down by 6% in any single quarter dating to Q4 2016. Previously, it was never more then 3% and only during Q1 of a year.
Given it employs 1.5 million and is in retailing, cloud computing, consumer electronics, entertainment, government contracting, transportation — its like the GM of 1950.
Can the labor market or the economy do well if Amazon struggling? The jury is out on that.
2 other data points from Amazon; they haven’t imposed a hiring freeze on software engineers like Facebook or Google, so they are hiring in certain positions. The other one is they froze construction on their mega campus in Bellevue (a suburb of Seattle), which was to be their replacement for their offices in Seattle (and it wasn’t because they patched up their differences with the city of Seattle).