A taste of stagflation

Real GDP growth lower than expected.
Core PCE inflation higher than expected.

Noise or the beginning of a trend?

The Federal Reserve won’t cut the fed funds rate with these data points. Stock and bond markets are down.




Bolded the key word. Expected. E.g. the collective opinion of various economists.

Core PCE came in 0.1% higher than expected. What if the economists had instead expected 0.1% higher in the first place? Does that then mean no stagflation? I don’t personally think so. I think a hit or miss by 0.1% is far less relevant than the actual inflation, regardless of any economist expectation.

As it pertains to GDP, that is more significant. Forecast was 2.5% and came in at 1.6%. That is a pretty big miss.

CME watch tool will update over night so I will be interested in seeing how it changes after today. My gut says that this data might actually pull the odds of a rate cut FORWARD from September and back to July.


It is not a trend. Factory building on the ground and economies of scale will ramp up from here.

Like maybe if the “wise” had an agenda? I remember, in January or February of 09. Cramer saying words to the effect “just watch. the first quarter numbers will come in better than expected”. When the numbers were reported, horrible numbers, auto industry sales and earnings horrible, the “news” touted everything as “better than expected”. The stock markets immediately turned up, because everything was “better than expected”.


The annual inflation rate for the United States was 3.5% for the 12 months ending March, compared to the previous rate of 3.2%, according to U.S. Labor Department data published on April 10, 2024.
annualized inflation rate of 3.5% up from 3.2% is hardly what one would call soaring inflation, and adding 275,000 jobs a month isn’t what one would call a slowing economy and stagflation.