I can somewhat agree here with ColoradoAccountant, and in order to understand where I am coming from you will have to agree with an anecdotal point of view of my own, I am a disabled vet with a finance degree and a limited fixed income, I am only paid 12 times per year and while it is (was in 2008) borderline entry level middle class at $48k and change for a single guy living in semi rural southern Oregon it is anything but that now. I say the cost of living here has risen by about 50% since 2011 and I have had paltry COLA increases amounting to 8.6% meaning I have lost at least 40% of my disposable income to inflation in the last 9 years or so.
That is not unique at all, in fact I am still at more or less the median wager earner income (though not household income which is about $61k) but the point here is that inflation is far higher than we are being told, mind you my rent is almost doubled just since 2013/14 lease was due to renew. Auto insurance is up in excess of 400% (in 2013 I paid $60 per month to insure a new 2013 BMW worth $57k, that same car is now worth about $13k and my January premium works out to $203 per month though I am now over 60, have lower coverage, and still have a clean driving record) and food is up at least 50% with a few exceptions (like subsidized milk which by the way I detest).
The reason I want to point all this out is that our data is so massively fictional how can you tell where GDP is? Or real interest rates?
For PEOPLE we are going to see stagflation, and as to definitions which a fine little debate seems to have started, all recessions/depressions in the old days were deflationary, while all boom times were inflationary, that was a given till the 1970's when we had inflation during a downturn and recession. STAG=STAGNANT economy flation= inflation. STAGFLATION. The fact that both were so protracted and seemed immune to any cure is what had them so worried.
So, solid rising prices during economic non performance or even contraction is all that means. If inflation is higher as my theory suggests then we are already are in a contraction, and have been dragging along near one for much of the "recovery" post GFC. The employment numbers are every bit as misleading as the inflation data. That employment has shown a better economy than really exists is easy to do when the numbers are fictional.
As the wider population loses real purchasing power to inflation that is just not reported, or denied, means a larger and larger share of their income goes to the basic necessities and I assure you that is centered on housing, groceries, and insurance just as in my case. I have slashed my budget to the bone, where I used to enjoy a number of little luxuries I now do not. Those things we cannot afford anymore see falling demand and will either have lower prices (deflation) or they will cease to be sold as unprofitable. While those basic necessity things we all demand that are going up in price will gain price momentum (inflation) in part because the providers of those things think we are willing to pay for them and if they put basics into shortage the price of inelastic demand goods will indeed skyrocket. Inflation is thus self reinforcing among such items.
Starting in the late sixties and especially the seventies we saw a lot of basic industries just fail in the USA as people had to stop buying all but basic items, we did not have global markets and low wage nations to import from and I suggest that will again be the case. When you have year in and year out inflation it does build on itself, it feeds on itself. At the end we had several years of double digit inflation while we considered ourselves lucky to get 1-2% in raises, or to have any job at all. I was in the service then, it was a nightmare. When I got out in late 1979 unemployment in my California county was over 30%. That is stagflation and trust me when I say it is horrifying to live through.