Looking back at the 1970’s: Which Areas of the Stock Market Did Well Under Stagflation

What is Stagflation?

Stagflation refers to the rare combination of high inflation, slow economic growth, and high unemployment. In a typical business cycle, inflation rises during periods of strong growth and falls during recessions when unemployment spikes. But in the 1970s, the U.S. experienced the worst of both worlds – soaring prices coupled with a stagnant economy and rising joblessness.

The unemployment rate significantly rose during the mid 1970’s:

While inflation data rapidly rose as well: