America's big stagflation scare is over
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The US economy's stagflation scare is over after a weak Q1 jobs report. Fears of stagflation were sparked by a weak first-quarter GDP print, but the April jobs report showed that 175,000 positions were added last month, below the consensus forecast of 238,000. Average hourly earnings also unexpectedly declined to 0.2%. This mix of data dispelled the stagflation narrative as job additions were not weak enough to signal a slowdown, but also not strong enough to support higher interest rates. The report eased concerns that arose from the latest GDP print, which showed a slowdown and high underlying inflation. Wall Street was also worried about stagflation, but the jobs report brought relief. If the report had printed weaker, it could have deepened the stagflationary outlook and potentially caused a market sell-off. However, the benchmark S&P 500 rose 1.14% after the report. The US experienced stagflation in the 1970s, characterized by high consumer prices, recessions, and a weak stock market.

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https://www.businessinsider.com/stagflation-us-economy-recession-outlook-forecast-q1-jobs-report-labor-2024-5