KEY POINTS:
There are few words economists like less than "recession" but one of them - "stagflation" - has reared its head in the US.
The "S" word occurs when an economy gets hit with high inflation while still suffering from slowing growth or recession. It last occurred in the 1970s.
"Stagflation is really a nasty word," said Victor Pugliese, with Broadpoint Securities in San Francisco. "The last time we had it, we had a terrible market."
US stocks tracked sideways through the 1970s as the nation grappled with oil shocks in 1973 and 1979.
Stagflation is persistent and so serious that few economists will be calling it just yet.
The hope is that the current oil price spike is short lived.
But Friday's Wall St meltdown had brokers spooked.
"This is the worst economic environment," said Dave Rovelli, at Canaccord Adams in New York. "I don't see how this is not stagflation."
