America is being haunted by the ghost of ‘stagflation,’ the brutal combination of stagnant growth and high inflation that made the 1970s such a slog

America is being haunted by the ghost of ‘stagflation,’ the brutal combination of stagnant growth and high inflation that made the 1970s such a slog

The American economy was riding high over the summer as displaced workers found new jobs and consumer activity sharply rebounded. Wall Street also had it good, with major stock indexes rising for seven straight months. But then summer turned to fall and the economic weather changed. The US labor market has slowed sharply and there are signs inflation might be here to stay. Now the country is barreling toward a situation last seen during the economic nightmare of the 1970s: the dreaded "stagflation." Now the ghost of stagflation, a brutal mix of stagnant economic growth and high inflation — hence the name — is haunting the fragile recovery from the pandemic. The stagflation of the 1970s ultimately led to an overhaul of the entire economic system, and policymakers are desperate to avoid similar disruption after the coronavirus crisis. Mentions of "stagflation" across company documents are at their highest level since 2008, data company FactSet found, even before third-quarter earnings season picks up. Bank analysts are churning out research notes on the topic. If we are really headed for stagflation 2.0, it will be bad economic news for years to come. Inflation has come in for the last three months in