Jim Cramer on stagflation issues and retail revenue

CNBC’s Jim Cramer said on Thursday that he believes fears that the US economy is heading for a period of stagflation should be allayed after a series of impressive retail reports.

Stagflation is a term used to describe slow economic growth in a time of high inflation. It was first discovered in the 1970s, but some commentators have warned that the world’s largest economy could return to it, as inflation warms and recovery from pandemic damage declines.

However, recent quarterly results from a handful of retailers from the department store chain Dillard̵[ads1]7;s to watchmaker Fossil shed light on the strength of the US consumer and suggest that economic activity remains robust, Cramer said.

“That’s it. Will not hear a word about stagflation,” said the “Mad Money” host. “There’s nothing stagnant about this economy. In fact, retailers may be experiencing their strongest quarter in history. I know I use a lot of superlatives, but it’s not excessive.”

Dillard’s, for example, earned $ 9.81 per share when Wall Street only expected $ 5.82, which helped send the stock up 10% on Thursday. “There’s such a huge demand that Dillard’s does not have to run any campaigns to get people into the store. It’s a staggering feat,” Cramer said.

Fossils, on the other hand, rose 23% on Thursday after reporting a “brilliant” quarter, Cramer said. “In the old days, Fossil used to give discounts on everything. Not this time,” he said.

“When these retail stocks lead, many others follow. It’s just another sign that despite the endless manipulation of inflation and stagflation by so-called experts, or possibly the supply chain – induced shortages, shoppers remain fearless and eager to buy.”