You’ve heard of Inflation (And know how scary it is), but have you heard of “staglation”? It’s also scary. Meriam-Webster defines staglation as “constant inflation in combination with stagnant consumer demand and relatively high unemployment”. Yikes.
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Some economic experts believe that stagnation in the United States is on the horizon. Why? Which signs indicate the stagflit comes and What can you do for financially to prepare for it?
GDP growth for slowing GDP (gross domestic product) – when economy production begins to decline or agreement – E. Large red flag alert for stagflit. And that flag was waved earlier this year. GDP dropped to an annual rate of 0.3% in the first quarter of 2025 (January, February and March), according to a previous estimate published by the US Economic Analysis Bureau (2).
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“The Federal Reserve is now projecting real GDP growth to 1.4% by 2025, which is a decline of 1.7% in its March projection,” Alex Zepaev said in B2PRIM group. “The OECD and the World Bank have also reduced the expectations of US growth as a result of trade tensions and policy uncertainty. In addition, the leading economic index of the Conference Board (LEI) has declined in May, marking 2.7% over the past six months.”
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Return to the word so closely linked to “staglation” – inflation. A key sign of stagflate is constant inflation. This is also called “sticky inflation” and we see it hovering around the most important things like food and fuel.
“These categories are less sensitive to raising interest rates, making them persistently expensive,” said Dane May, director and co-founder in Depaolo and May Strategic Treasure. “These are non -discretionary costs that boost household budgets. When consumers are forced to spend more on the most important things, they are reduced elsewhere. It slows economic growth and makes inflation more painful because it is related to needs rather than luxury or optional spending.”
Another A key warning sign Staglation is weakening in the labor market. With this, we see reducing job openings, layoffs and unemployment rates. Now, the labor market shows signs of weight loss.
“Recent job data has repeatedly missed the expectations of economists,” said Akeejk Falcon, CRCC, CEO of Sokol’s wealth advisors. “Employers added much fewer jobs in February than in January, and unemployment claims increased. This softening of the labor market is a classic predecessor of economic stagnation.”
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