America, Our Long Inflation Nightmare Is Over — for Now
Cumulative wage gains show households have finally gotten ahead of the surge in consumer prices. Hold the champagne.
We can afford it.
Photographer: Spencer Platt/Getty Images
A recession typically ends when the economy stops shedding jobs, leaving in its wake a hole in the labor market. The economy is not considered to be fully recovered from the downturn until the lost jobs are regained. Simple enough. So what does it mean to recover from a spike in inflation rates?
That’s a harder question to answer given that the US has suffered fewer bouts of inflationary periods than recessions in recent history. Before the pandemic-era surge in consumer prices, the last time inflation took off was in the late 1970s, or more than 40 years earlier. And although the inflation rate has moderated to acceptable levels, an answer is worth exploring given that we face another bout of potentially nasty bout of inflation tied to the Trump administration’s tariff policies.