Inflation Worsening Despite Sagging Demand, Suggesting Stagflation: Philly Fed

Patrick Harker, President and CEO of the Federal Reserve Bank of Philadelphia, addresses an audience at the Philadelphia Fed in 2017. Courtesy of the Federal Reserve Bank of Philadelphia

U.S. inflation rates are getting worse despite a decline in consumer demand and a strong labor market, which suggests that the American economy is currently facing stagflation.

Manufacturing activity in the Philadelphia region for October, fell for the second consecutive month, despite rising inflationary pressures, reported the Federal Reserve Bank of Philadelphia on Oct. 20.

The Philadelphia Fed’s survey covers manufacturing in the Third Federal Reserve District, which includes eastern Pennsylvania, southern New Jersey, and Delaware.

Overall factory results for October suggest a stagflationary environment.