Despite the Biden administration’s claims to the contrary, a variety of data seems to show that the U.S. economy is headed toward a period of “stagflation,” which is defined as a period of rising inflation, high unemployment and decreased growth.
The latest manufacturing reports showed that the sector remained in contraction, falling short of increases widely expected by analysts. Despite posting a month-to-month rise compared to August’s numbers, September was the fifth straight month of contraction — and the 10th of the past 11 months, according to the S&P Global Purchasing Managers Index.
According to S&P Global Market Intelligence Chief Business Economist Chris Williamson, last month represented “a welcome near-stabilization of business conditions in manufacturing,” but he acknowledged that “further increase in price pressures is a concern on the inflation front.”
While he struck an optimistic tone in his forecast of production growth throughout the rest of 2023, Williamson cited inflation as a clear impediment to the health of the economy.
“Less encouraging was the news on the inflation outlook, as producers’ costs rose at the fastest rate for five months, largely on the back of higher oil prices,” he asserted. “These increased costs are already feeding through to higher prices to customers, which will inevitably result in some renewed upward pressure on inflation.”
In addition to rising costs and the stagnation of manufacturing demand, a recent uptick in the unemployment rate appears to be the final sign that stagflation is an increasing economic threat.
More than a month ago, Commonwealth Financial Network Chief Investment Officer Brad McMillan issued a tentative warning.
“Right now, inflation is bad, but the perception is even worse than reality because of gas prices,” he said at the time. “On the one hand, I think it’s absolutely right to be worried about those things, but on the other hand, you need to be as worried about them as the data indicates—and I think people are too worried right now.”
Meanwhile, President Joe Biden appears to be hinging his re-election campaign on the message that his economic policies have been good for the American people.
Bidenflation is robbing Louisiana families of $9,576 a year.
That’s almost $10K that they could be putting towards their mortgage, car payment, or retirement savings. pic.twitter.com/t9F82PgJgF
— John Kennedy (@SenJohnKennedy) October 2, 2023
That rhetoric continues to fall flat with a majority of voters, however, and even prominent Democrats are pushing back.
“I’ve never understood why you would brand an economy in your name when the economy hasn’t fully recovered yet,” said Michael LaRosa, a former spokesperson for first lady Jill Biden. “People need to be able to see and feel an economy in their own personal bank accounts. And it doesn’t change no matter how loud you scream the economy is better.”