Growing Long-Term Unemployment May Signal Stagflation

The gains recognized in the stock market may be short lived. Despite reactivated liquidity moving into the stock market, a loss of confidence in discounted future earnings may lead to a correction in the near term. If rapid growth in the U.S. economy is slow to materialize, and the ranks of the “long-term unemployed” continue to swell, the Federal Reserve will become increasingly frustrated in its mission to achieve “full employment.”

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