Stagflation is on the way

It's official. The U.S. economic recovery is stumbling again, as indicated by Thursday's report that GDP growth plunged to only 1.8% in the first quarter (from 3.1% growth in the previous quarter). And spiking oil, food, and other commodity prices have inflation on the rise. Don't lose sight of how we got here. Exactly a year ago the recovery from ‘The Great Recession' of 2007 – 2009 also stalled significantly as the government's stimulus efforts, including rebates to homebuyers and cash-for-clunkers programs, expired. Economic reports from the housing industry, auto sales, and consumer spending were the leading indicators that the recovery had stalled, which was then confirmed when the second-quarter GDP report was released and showed economic growth had slowed from 3.7% in the first quarter to only 1.7% in the second quarter.

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