Chapter 1: What alarming economic indicators are raising stagflation concerns?
Alarm bells on the health of the U.S. economy are ringing. An unexpectedly dismal jobs report, growing unemployment and the ensuing uncertainty over trade policy piled on top of surging oil prices make the financial outlook particularly bleak this month. Could a recession be next? Hello and welcome to USA Today's The Excerpt. I'm Dana Taylor. Today is Wednesday, March 11th, 2026.
Joining me to discuss recent economic indicators and what might lie ahead is USA Today money reporter Andrea Riquier.
Chapter 2: What is stagflation and why should we be concerned?
Andrea, thank you so much for joining me. Hey, Dana.
Chapter 3: How are rising gas prices affecting American consumers?
Thanks for having me. Andrea, you wrote that economists, analysts, and investors are concerned right now about the possibility of stagflation. What is stagflation, and is this something we should be concerned about? So stagflation refers to a really uncomfortable moment in the economy where economic growth is stagnant. It's not growing or even receding. And yet inflation is high.
Typically, you see inflation higher when growth is strong.
Chapter 4: What does the latest jobs report reveal about the economy?
But this is uncomfortable because the policy responses are opposite for each one. When you have high inflation, you might want to raise interest rates to keep demand lower. And when you have slow growth, you might want to drop them in order to stimulate demand. So stagflation is a really difficult place for the economy and for the policymakers.
A big concern with American consumers right now is the U.S.-Israel war on Iran. Trump has sort of waffled on his estimation of how long this conflict could last and how much it might cost Americans. Meanwhile, gas prices have been spiking across the country.
Chapter 5: How is consumer sentiment impacting economic outlook?
What can you tell us here? So I actually checked the nationwide gas prices just before we started recording. Across the nation, the average is $3.55. Obviously, there's huge local disparities, but it has been suggested that the $3.50 mark is roughly where things start to get a little uncomfortable for American consumers.
If this is as high as we get and prices sort of fall back from here, maybe it's not so difficult for most American consumers, most households. If it stays elevated like this, things could start to get very uncomfortable for people. The president has said that people should be OK with a little short term discomfort in order to settle things for the long term.
But, you know, American households are strapped for enough money to go around to buy everything that they need already. So, you know, we'll just have to see where things go from here. There could be a quick resolution to this war or it could drag on.
Chapter 6: What role does trade policy uncertainty play in the economy?
Let's turn now to the latest jobs report. What does it say? And are you at all surprised? It was a surprising jobs report. The Labor Department said that 92,000 jobs were lost in the month of February. They also downgraded the overall number for the full year, 25. And when you average out the 181,000 jobs that were created throughout 2025,
That comes down to about 15,000 jobs a month, which is barely treading water. So take any one month with a grain of salt. But when you look at the longer trend over, say, you know, 14 months, it does not look good.
Chapter 7: Are we on the brink of a recession based on current trends?
Andrea, help me put the latest unemployment numbers into perspective here. We saw robust hiring numbers in January, right? Yeah. Right. Again, take any one month with a grain of salt. But when you smooth it all out over a period of time, it looks like a slower growth, slowing economy. President Donald Trump's signature economic policy centered on his trade policies involving tariffs.
Those have recently been thrown out by the Supreme Court.
Chapter 8: How are the Federal Reserve's actions influencing the economy?
He says that he has other ways to accomplish the same thing, but that it might take a little time to implement. How big of a role is that uncertainty playing here? I think it's playing a big role.
There's a lot of uncertainty around the tariffs that quite likely makes a lot of businesses a little bit more hesitant about committing to long-term plans like hiring, like capital expenditures, other than the AI infrastructure boom that we've talked about a lot. But it's certainly not helping on the margins.
The Supreme Court decision on the tariffs is not the only big sort of headwind out there in the economy. Obviously, the war is another one. And it's just a lot of uncertainty in a midterm election year as well for businesses to sort of process. And it doesn't necessarily look like every business is going to go out and start shedding workers the way they did, say, in the COVID-19 pandemic.
But it doesn't give a lot of comfort for wanting to commit to things long term either. Economists with the Joint Economic Committee have put the cost of tariffs for the average American family at $1,700. Can Americans expect to see this money refunded at any point? Yeah, that's the $1,700 question, right? I think we would all like to see some money back.
I'm not sure that there's any way to know for sure. We know that a lot of companies have filed lawsuits about this. I think everybody would like a little bit of that money back. But I think that that could drag on for a while. And I wouldn't bet on it. Let's put it that way. What are we hearing from the Fed on the state of the economy? I believe their next meeting is next week. That's right.
The March meeting is next week. A lot of them have come out recently since the start of the Iran war and said exactly what we said at the top of the hour. This really complicates things. Again, a slow growth economy could be stimulated by rate cuts, but higher inflation, which to some extent they're a
Mary Daly of the San Francisco Fed said last Friday that a perfectly acceptable response to where we are right now is just to hold steady, to not do anything. And that's what most investors expect them to do for the foreseeable future. Andrea, we're also expecting to see a new Fed chair in May. That might change things, right? Tell me about that.
So first of all, Kevin Warsh still has to be confirmed and that process hasn't started yet. But yes, Donald Trump has nominated him with the belief that Kevin Warsh will be a little bit more amenable to cutting rates than Jay Powell has been.
We know that Kevin Warsh, you know, he has served on the Federal Reserve Board before and we know that he has a pretty good understanding of the lay of the land. And I don't think anybody can expect any particular policymaker to move in one direction or another given all the uncertainty, all the crosswinds that are going on right now. We'll just have to wait and see.
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