Taryn Phaneuf

Consumers are spending less money because they're unemployed or they're worried about being unemployed. And when demand is low, prices tend to fall. So as you've probably realized, inflation and stagnation don't usually go hand in hand. With inflation, the economy is running hot, but with stagnation, it's slowing down. So when these two things happen simultaneously, it means that something is off.

Consumers are spending less money because they're unemployed or they're worried about being unemployed. And when demand is low, prices tend to fall. So as you've probably realized, inflation and stagnation don't usually go hand in hand. With inflation, the economy is running hot, but with stagnation, it's slowing down. So when these two things happen simultaneously, it means that something is off.

Consumers are spending less money because they're unemployed or they're worried about being unemployed. And when demand is low, prices tend to fall. So as you've probably realized, inflation and stagnation don't usually go hand in hand. With inflation, the economy is running hot, but with stagnation, it's slowing down. So when these two things happen simultaneously, it means that something is off.

Economists look for some key signs. Are prices rising? Is productivity slowing or flat? Is unemployment going up? If all these things are happening, that's a recipe for stagflation. Wages factor in as well. If wage increases are keeping pace with prices, consumers have a better chance of weathering the storm. But it's unlikely that wages will increase if productivity slows and unemployment rises.

Economists look for some key signs. Are prices rising? Is productivity slowing or flat? Is unemployment going up? If all these things are happening, that's a recipe for stagflation. Wages factor in as well. If wage increases are keeping pace with prices, consumers have a better chance of weathering the storm. But it's unlikely that wages will increase if productivity slows and unemployment rises.

Economists look for some key signs. Are prices rising? Is productivity slowing or flat? Is unemployment going up? If all these things are happening, that's a recipe for stagflation. Wages factor in as well. If wage increases are keeping pace with prices, consumers have a better chance of weathering the storm. But it's unlikely that wages will increase if productivity slows and unemployment rises.

It's a double whammy. As prices rise across the board, consumers might tighten their budgets. The antidote to that budget crunch would be things like pay raises. But if the economy is stagnating, those opportunities are less probable.

It's a double whammy. As prices rise across the board, consumers might tighten their budgets. The antidote to that budget crunch would be things like pay raises. But if the economy is stagnating, those opportunities are less probable.

It's a double whammy. As prices rise across the board, consumers might tighten their budgets. The antidote to that budget crunch would be things like pay raises. But if the economy is stagnating, those opportunities are less probable.

Can you tell us about that? The misery index is calculated by adding together the unemployment and inflation rates. The higher it is, the more miserable the economy feels. The good news is that right now the misery index is low.

Can you tell us about that? The misery index is calculated by adding together the unemployment and inflation rates. The higher it is, the more miserable the economy feels. The good news is that right now the misery index is low.

Can you tell us about that? The misery index is calculated by adding together the unemployment and inflation rates. The higher it is, the more miserable the economy feels. The good news is that right now the misery index is low.

Not quite as low as the years preceding the pandemic, but nowhere near the recent highs during the pandemic and the Great Recession or historic peaks during the 1970s and 80s.

Not quite as low as the years preceding the pandemic, but nowhere near the recent highs during the pandemic and the Great Recession or historic peaks during the 1970s and 80s.

Not quite as low as the years preceding the pandemic, but nowhere near the recent highs during the pandemic and the Great Recession or historic peaks during the 1970s and 80s.

The 70s and 80s saw a prolonged period of stagflation. Now, how did that happen? In the 1970s and 80s, the U.S. got hit with crisis after crisis. Government spending was up due to the Vietnam War and new domestic policies. Then there were multiple recessions and two different energy crises that spiked oil prices. As a result, inflation skyrocketed, economic growth stalled, and unemployment rose.

The 70s and 80s saw a prolonged period of stagflation. Now, how did that happen? In the 1970s and 80s, the U.S. got hit with crisis after crisis. Government spending was up due to the Vietnam War and new domestic policies. Then there were multiple recessions and two different energy crises that spiked oil prices. As a result, inflation skyrocketed, economic growth stalled, and unemployment rose.

The 70s and 80s saw a prolonged period of stagflation. Now, how did that happen? In the 1970s and 80s, the U.S. got hit with crisis after crisis. Government spending was up due to the Vietnam War and new domestic policies. Then there were multiple recessions and two different energy crises that spiked oil prices. As a result, inflation skyrocketed, economic growth stalled, and unemployment rose.

Now, normally, unemployment costs cool inflation, but this time it didn't. When inflation reached more than 12% in November 1974, unemployment was at almost 7%. The jobless rate was similarly high six years later when inflation hit almost 15% in March 1980.

Now, normally, unemployment costs cool inflation, but this time it didn't. When inflation reached more than 12% in November 1974, unemployment was at almost 7%. The jobless rate was similarly high six years later when inflation hit almost 15% in March 1980.

Now, normally, unemployment costs cool inflation, but this time it didn't. When inflation reached more than 12% in November 1974, unemployment was at almost 7%. The jobless rate was similarly high six years later when inflation hit almost 15% in March 1980.

Eventually, the Fed raised interest rates dramatically to bring inflation down, and the experience fundamentally changed how monetary policy works in the U.S. The new approach is likely one reason we've avoided stagflation more recently.

Eventually, the Fed raised interest rates dramatically to bring inflation down, and the experience fundamentally changed how monetary policy works in the U.S. The new approach is likely one reason we've avoided stagflation more recently.

Eventually, the Fed raised interest rates dramatically to bring inflation down, and the experience fundamentally changed how monetary policy works in the U.S. The new approach is likely one reason we've avoided stagflation more recently.

Stagflation became a major concern in 2022. We were two years into the coronavirus pandemic, and demand was running hot. But the supply side of the economy was struggling due to a few factors. Mainly, it was supply chain issues, and then Russia invaded Ukraine, which pushed oil prices higher. The Fed took steps to combat inflation, but the effects were slow, and people worried it wasn't working.

Stagflation became a major concern in 2022. We were two years into the coronavirus pandemic, and demand was running hot. But the supply side of the economy was struggling due to a few factors. Mainly, it was supply chain issues, and then Russia invaded Ukraine, which pushed oil prices higher. The Fed took steps to combat inflation, but the effects were slow, and people worried it wasn't working.

Stagflation became a major concern in 2022. We were two years into the coronavirus pandemic, and demand was running hot. But the supply side of the economy was struggling due to a few factors. Mainly, it was supply chain issues, and then Russia invaded Ukraine, which pushed oil prices higher. The Fed took steps to combat inflation, but the effects were slow, and people worried it wasn't working.

The concern was that the economy was going to stall, but inflation wasn't, and that's the conundrum we call stagflation.

The concern was that the economy was going to stall, but inflation wasn't, and that's the conundrum we call stagflation.

The concern was that the economy was going to stall, but inflation wasn't, and that's the conundrum we call stagflation.

Right now, everyone is waiting to see what impact the Trump administration's sweeping tariffs have. Tariffs have the potential to simultaneously raise prices and slow growth, depending on how severe they are and how long they're in place. One other major difference between then and now is that oil prices actually dropped recently to the lowest levels we've seen since 2021.

Right now, everyone is waiting to see what impact the Trump administration's sweeping tariffs have. Tariffs have the potential to simultaneously raise prices and slow growth, depending on how severe they are and how long they're in place. One other major difference between then and now is that oil prices actually dropped recently to the lowest levels we've seen since 2021.

Right now, everyone is waiting to see what impact the Trump administration's sweeping tariffs have. Tariffs have the potential to simultaneously raise prices and slow growth, depending on how severe they are and how long they're in place. One other major difference between then and now is that oil prices actually dropped recently to the lowest levels we've seen since 2021.

So at least the price situation isn't being exacerbated by high or rising transportation costs.

So at least the price situation isn't being exacerbated by high or rising transportation costs.

So at least the price situation isn't being exacerbated by high or rising transportation costs.

It's tricky because like I said earlier, inflation and stagnation don't typically exist simultaneously. To fight inflation, the Fed raises interest rates, but to fight stagnation, it lowers them. Then during the pandemic and the Great Recession, we also saw more government spending to help keep the economy going.

It's tricky because like I said earlier, inflation and stagnation don't typically exist simultaneously. To fight inflation, the Fed raises interest rates, but to fight stagnation, it lowers them. Then during the pandemic and the Great Recession, we also saw more government spending to help keep the economy going.

It's tricky because like I said earlier, inflation and stagnation don't typically exist simultaneously. To fight inflation, the Fed raises interest rates, but to fight stagnation, it lowers them. Then during the pandemic and the Great Recession, we also saw more government spending to help keep the economy going.

But when both inflation and stagnation hit at once, like in the 1970s, those tools can work against each other. For now, the Fed is being cautious, but may have to decide which side of the problem to focus on first.

But when both inflation and stagnation hit at once, like in the 1970s, those tools can work against each other. For now, the Fed is being cautious, but may have to decide which side of the problem to focus on first.

But when both inflation and stagnation hit at once, like in the 1970s, those tools can work against each other. For now, the Fed is being cautious, but may have to decide which side of the problem to focus on first.

That's right. Inflation has cooled. April's Consumer Price Index, which measures inflation, shows 2.3% annually or 2.8% excluding food and energy, which are more volatile. That's heading toward the Fed's target range of 2%, but there's still a little way to go. Growth was pretty strong over the last few years, but in the first quarter of 2025, gross domestic product data was negative.

That's right. Inflation has cooled. April's Consumer Price Index, which measures inflation, shows 2.3% annually or 2.8% excluding food and energy, which are more volatile. That's heading toward the Fed's target range of 2%, but there's still a little way to go. Growth was pretty strong over the last few years, but in the first quarter of 2025, gross domestic product data was negative.

That's right. Inflation has cooled. April's Consumer Price Index, which measures inflation, shows 2.3% annually or 2.8% excluding food and energy, which are more volatile. That's heading toward the Fed's target range of 2%, but there's still a little way to go. Growth was pretty strong over the last few years, but in the first quarter of 2025, gross domestic product data was negative.

That was mainly due to an uptick in imports as businesses stocked up on foreign goods ahead of tariffs. Second quarter data should hopefully provide a clearer picture of where growth is trending. Unemployment has stayed relatively low and stable, but there are some signs of softening in the labor market, including a decline in job openings.

That was mainly due to an uptick in imports as businesses stocked up on foreign goods ahead of tariffs. Second quarter data should hopefully provide a clearer picture of where growth is trending. Unemployment has stayed relatively low and stable, but there are some signs of softening in the labor market, including a decline in job openings.

That was mainly due to an uptick in imports as businesses stocked up on foreign goods ahead of tariffs. Second quarter data should hopefully provide a clearer picture of where growth is trending. Unemployment has stayed relatively low and stable, but there are some signs of softening in the labor market, including a decline in job openings.

So there are some warning bells going off right now for economists. Fed Chair Jerome Powell has even acknowledged that there is a heightened risk of stagflation ahead.

So there are some warning bells going off right now for economists. Fed Chair Jerome Powell has even acknowledged that there is a heightened risk of stagflation ahead.

So there are some warning bells going off right now for economists. Fed Chair Jerome Powell has even acknowledged that there is a heightened risk of stagflation ahead.

Yes, definitely. Start by building or rebuilding your emergency fund. High-yield savings accounts are still offering decent interest rates at the moment, so that could be a good place for protecting your savings from inflation. Second, the high interest rate environment makes it especially expensive to borrow money, so it's a good idea to reduce your debt if you're able.

Yes, definitely. Start by building or rebuilding your emergency fund. High-yield savings accounts are still offering decent interest rates at the moment, so that could be a good place for protecting your savings from inflation. Second, the high interest rate environment makes it especially expensive to borrow money, so it's a good idea to reduce your debt if you're able.

Yes, definitely. Start by building or rebuilding your emergency fund. High-yield savings accounts are still offering decent interest rates at the moment, so that could be a good place for protecting your savings from inflation. Second, the high interest rate environment makes it especially expensive to borrow money, so it's a good idea to reduce your debt if you're able.

Prioritize high-interest debt like credit cards. Third, consider what major purchases or expenses you can postpone to maintain your cash cushion. Inflation can be a bit of a self-fulfilling prophecy. If people go out and panic buy goods because they're afraid prices are going to go up, they might still end up paying more because of the sudden spike in demand.

Prioritize high-interest debt like credit cards. Third, consider what major purchases or expenses you can postpone to maintain your cash cushion. Inflation can be a bit of a self-fulfilling prophecy. If people go out and panic buy goods because they're afraid prices are going to go up, they might still end up paying more because of the sudden spike in demand.

Prioritize high-interest debt like credit cards. Third, consider what major purchases or expenses you can postpone to maintain your cash cushion. Inflation can be a bit of a self-fulfilling prophecy. If people go out and panic buy goods because they're afraid prices are going to go up, they might still end up paying more because of the sudden spike in demand.

Finally, stay open to job opportunities. The job market is full of uncertainty right now, but it's still wise to keep a lookout for ways to boost your earnings. Thanks for helping us out today, Taryn. Happy to do it.

Finally, stay open to job opportunities. The job market is full of uncertainty right now, but it's still wise to keep a lookout for ways to boost your earnings. Thanks for helping us out today, Taryn. Happy to do it.

Finally, stay open to job opportunities. The job market is full of uncertainty right now, but it's still wise to keep a lookout for ways to boost your earnings. Thanks for helping us out today, Taryn. Happy to do it.

Stagflation describes a rare set of circumstances in the economy when inflation and stagnation occur at the same time. Inflation, which is something we're all pretty familiar with, is the rate at which prices increase. A little inflation is seen as a sign of a normal, healthy economy, and the Federal Reserve targets a low, stable inflation rate of around 2%.

Stagflation describes a rare set of circumstances in the economy when inflation and stagnation occur at the same time. Inflation, which is something we're all pretty familiar with, is the rate at which prices increase. A little inflation is seen as a sign of a normal, healthy economy, and the Federal Reserve targets a low, stable inflation rate of around 2%.

Stagflation describes a rare set of circumstances in the economy when inflation and stagnation occur at the same time. Inflation, which is something we're all pretty familiar with, is the rate at which prices increase. A little inflation is seen as a sign of a normal, healthy economy, and the Federal Reserve targets a low, stable inflation rate of around 2%.

But when prices rise too fast, it makes it hard for consumers and businesses to keep up. Then there's stagnation. That describes an economy that is basically stalled. It's experiencing little, if any, growth. In a situation like that, demand in the economy is very low. Businesses have pulled back and they might even be cutting staff.

But when prices rise too fast, it makes it hard for consumers and businesses to keep up. Then there's stagnation. That describes an economy that is basically stalled. It's experiencing little, if any, growth. In a situation like that, demand in the economy is very low. Businesses have pulled back and they might even be cutting staff.

But when prices rise too fast, it makes it hard for consumers and businesses to keep up. Then there's stagnation. That describes an economy that is basically stalled. It's experiencing little, if any, growth. In a situation like that, demand in the economy is very low. Businesses have pulled back and they might even be cutting staff.