My first childhood memory is of sitting in the back of a station wagon with my brother. My mother was at the wheel, and we were in a long line waiting for gasoline. It might have been 1974; I learned, at some point, that an embargo by oil-producing nations had created shortages that led to even-and-odd-day rationing. The last number on our license plate was 8, so we could buy gasoline only on an even-numbered date.
I’ve thought about this recently because shortages of various goods and services, coupled with inflation like we’ve not seen in ages, have some observers wondering: Are we about to revisit the 1970s? I understand the concerns. Rapidly rising inflation eviscerated the economy then. The unemployment rate rose dramatically. It was a terrible environment for investors for two or three years.
I can tell you that, no, we’re not about to enter a period of stagflation—stagnant economic activity amid high unemployment and inflation—like the 1970s. We continue to anticipate economic growth and, unlike in the 1970s, demand for workers is high. Among several challenges, the most significant factor holding back the economy now is a lack of workers.