Inflation continues to tick up, and new federal data shows a growing number of people are out of work.
That combination is causing concern about the potential for stagflation.
"Stagflation is when the economy is weakening, weakening labor market, weakening GDP, but also we're seeing rising prices," said Bankrate financial analyst Stephen Kates.
Consumer prices were up 2.9% in August compared to a year ago, rising at their fastest pace since January.
Meanwhile, separate federal data showed 263,000 people submitted jobless claims last week, the most since October of 2021.
Those conditions point to stagflation, but a milder version than what Americans saw a half century ago, says Kates.
"You could call that stagflation, but it is a far cry from the stagflation that is sort of built into the history books from the 70s and 80s," Kates said.
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The dual data indicates a challenging environment for consumers, who now face higher prices with weaker employment prospects.
"Stagflation is really a one-two punch for consumers<" said economics professor Abby Hall. "And we can think about this as like a gut punch and then taking one right to the chin."
Hall says the data is also a potential headache for the Federal Reserve, which would typically raise interest rates to curb inflation, but lower interest rates to help support a weakening jobs market.
"The Fed has a really difficult task of trying to balance these two," Hall said. "And when you have an occasion where both are rising, the policy prescription is really unclear."
The Federal Reserve will meet next week and announce its interest rate decision on Wednesday.
