The information provided on EL7.AI is for educational and informational purposes only and does not constitute financial advice.
The information provided on EL7.AI is for educational and informational purposes only and does not constitute financial advice.
Amid growing concerns over a slowdown in the US economy, a deep analysis of Q1 GDP data reveals structural weaknesses. According to an analysis published by Seeking Alpha, GDP grew 2.1% in the first quarter, but that figure was artificially boosted by import revisions. Consumer spending growth hit a four-year low, pointing to eroding household purchasing power.
Sign in to access this content
Sign InThis disappointing reading comes as other data show broad-based weakness. According to market data, the US Services PMI stood at 51.3 on June 23, beating forecasts but remaining near the neutral level. New home sales fell 7.3% in May against expectations of a 2.9% rise, according to data released June 24. On trade, the current account deficit widened to $226.8 billion, exceeding the $217.5 billion forecast.
With no near-term catalysts to boost demand, investors are closely watching the Federal Reserve's bank stress test results due June 24, as well as upcoming confidence and jobs data. The key question remains whether the slowdown in consumer spending will lead to a recession in the second half of the year, especially with continued pressure from high interest rates.