Can you say stagflation? The Jimmy Carter years may be repeating themselves as the Obama economy continues to flounder. U.S. economic growth slowed to a 1.8 percent annual rate in the first quarter of 2011, after a 3.1 percent fourth quarter pace last year. Meanwhile, food and gasoline prices have sent the broad measure of inflation rising at its fastest pace in 2-1/2 years. To make matters worse, more people sought unemployment benefits last week. This was the second increase in applications for unemployment benefits in three weeks.
Federal Reserve chairman Ben Bernanke hinted yesterday that such disturbing news was in the offing, at the first scheduled press conference in the Fed’s history. But, no doubt in an effort to calm the markets, he played down the significance of the lower growth and higher inflation figures as transitory.