In 1964, inflation was 1 percent and unemployment was 5 percent. Ten years later, inflation would be over 12 percent and unemployment was above 7 percent. By the summer of 1980, inflation was near 14.5 percent, and unemployment was over 7.5 percent. Inflation resulted from federal monetary and economic policy and also from external factors such as the big rise in oil prices. It accompanied longer-term factors, so rising prices were part of a fall in employment, internal and external demand, and a slowing of economic growth – hence stagflation. Interest rates rose after 1965 and spiked sharply higher still in the late 1970s, business investment slowed, productivity faltered, and the nation’s trade balance with the rest of the world worsened. And inflation was seen as the primary cause of widespread problems but the state’s response to inflation could also be seen as important. Attempts at price and wage control in the early 1970s and a failure to control money supply and public spending were seen by critics as adding to the problem. However, the long period of prosperity was coming to an end by 1973 with greater foreign competition, a loss of demand for traditional products especially steel, the oil crisis undermining the low-cost energy which had fuelled the economy and problems with productivity and a stock crisis. High levels of spending. Some failure of economic growth to reduce income inequality and the breakdown of the Bretton Woods system have to be seen as factors. It could be seen that stagflation was a result of long-term structural weaknesses and unsustainable policies rather than a standalone problem.