Stagflation

STAGFLATION….The Washington Post reports that the latest economic news is grim:

The nation’s gross domestic product, which measures the value of all goods and services produced, rose at a below-average 2.5 percent annual rate in the second quarter….Meanwhile, consumer prices shot up at a heated 4.1 percent annual pace.

The combination of slow growth and high inflation, of course, is “stagflation,” and yesterday Brad DeLong linked to a Nouriel Roubini piece suggesting that the number of news reports mentioning stagflation (a “potential barometer” of recession) had been quite high recently.

But is that true? Is the number not just high, but higher than usual? Only a chart can tell us for sure! And here it is: the number of citations of the word “stagflation” from Nexis over the past year. (The July 2006 number is a projection.)

Sure enough, Roubini is right: mentions of stagflation spiked heavily starting last month. And given today’s news, I’ll bet they’ll spike even higher in the coming months. If news cites really are a decent way of projecting economic performance, the news is not good.