This is a CNN News Network Article today. I think stagflation is a combination of weak growth and high inflation. Some background:
As noted here, the advance estimate for sequential GDP growth is 1.6%, below the consensus of 3.4. But as discussed here, GDP+ is 2.6% and final sales to domestic private buyers are 3.0%. Additionally, we have the following key monthly indicators followed by the NBER Business Cycle Dating Committee.
figure 1: CES Nonfarm Employment (NFP) employment (blue bold), civilian employment (orange), industrial production (red), personal income excluding current transfers in 2017$ (green bold), manufacturing and trade 2017 Sales $ (black), 2017 consumption (light blue), 2017 monthly GDP (pink), third release GDP (blue bar), all logarithms normalized to 2021 M11=0. Source: BLS via FRED, Federal Reserve, BEA 2024Q1 Advance Release, S&P Global Market Insights (Nigerian macroeconomic consultant, IHS Markit) (4/1/Published in 2024) and the author's calculations.
Note that nonfarm payrolls, civilian employment, personal income, consumption and industrial production all rose in March. One can use alternative indicators of GDP, monthly GDP and NFP. I use GDP+, the Philadelphia Fed Coincident Index, and the Philadelphia Fed Early Benchmark NFP respectively.
figure 1: Non-farm payroll (NFP) employment, civilian employment (orange), industrial production (red), personal income excluding current transfers (China) adjusted by the ratio of the early baseline country sum to the post-baseline country sum (bold cyan). 2017$ (bold green), Manufacturing and Trade Sales$ in 2017 (black), Consumption$ in 2017 (light blue), and the consensus index (light pink), GDP+ releases (purple bars), all pairs The numbers are normalized to 2021M11=0.Sources: BLS via FRED, Federal Reserve, BEA Q1 2024 Advance Release, Federal Reserve Bank of Philadelphia [1], [2], [3]. and the author's calculations.
To account for inflationary trends, I show instantaneous inflation below (Eckhout, 2023) for headers and core PCE and CPI:
image 3: Instantaneous inflation for PCE deflator (blue) and CPI (tan), per Eckhout(2023). Sources: BEA, BLS, via FRED, and author's calculations.
Figure 4: Instantaneous inflation for core PCE deflator (blue) and core CPI (tan), per Eckhout(2023). Sources: BEA, BLS, via FRED, and author's calculations.
When the trend is about 2 percentage points, the annual growth rate of economic activity is about 2.2-2.9 percentage points, and trend inflation is about 4 percentage points, I am not sure whether the term “stagflation” is correct.
