Economists warn that the country is experiencing "stagflation," the combination of elevated unemployment and sharp inflation that crippled the U.S. economy in the 1970s.
"Now one can make a case that ‘mild' stagflation is already underway," New York University economist Nouriel Roubini wrote in a column last month. "Inflation is rising in the United States and many advanced economies, and growth is slowing sharply, despite massive monetary, credit, and fiscal stimulus."
Growing concerns about stagflation come as Democrats and President Joe Biden push for a $3.5 trillion spending bill, which some lawmakers warn will worsen the country's inflation problems.
"I believe that spending trillions more dollars not only ignores present economic reality, but makes it certain that America will be fiscally weakened when it faces a future recession or national emergency," Sen. Joe Manchin (D., W.Va.) wrote in a Wall Street Journal op-ed earlier this month.
Inflation has jumped 5.3 percent over the last year, reaching a 13-year high, the Labor Department reported last week. And while the unemployment rate in August dropped to 5.2 percent, job growth hit a seven-month low, according to the department.
Steep energy prices have driven the United States' inflation surge, raising concerns among economists that increased demand in the winter months will push consumer prices even higher.
"I am actually getting quite concerned as we head into winter … we could see a very sharp spike in energy prices into the last quarter," Jeffrey Halley, senior market analyst at Oanda Asia Pacific Pte., told Bloomberg on Thursday. "That may feed through into ever more inflation."
The Biden administration, which banned new gas and oil leases on federal lands and blocked construction of the Keystone XL oil pipeline, has faced criticism for surging energy costs. Nearly 80 percent of registered voters blame Biden for the country's high inflation, according to an August Fox News poll.