The median nowcast compiled by CapitalSpectator.com suggests that after two consecutive quarters of slower growth, US economic activity may stabilize in the second quarter. The estimated 1.9% increase in output for the April-through-June period is a slight improvement over the 1.6% advance in Q1, indicating a possible first improvement since the surge in output in Q3 of 2023. However, uncertainty remains surrounding second-quarter economic activity due to the lack of hard data for April and the unpredictability of May and June.
Some analysts are concerned about the rising risk of stagflation in the US, where inflation remains high while economic growth slows. Federal Reserve Chairman Jerome Powell dismissed this risk earlier in the week, stating that he does not foresee stagflation occurring.
Despite differing opinions on the outlook for the US economy, a median estimate of 1.9% GDP growth for Q2 provides a baseline for monitoring economic activity in the upcoming weeks. Steady consumer spending continues to be a driving force behind the economy, with services spending showing positive growth.
While some early Q2 data suggests a loss of momentum, overall outlook remains cautiously optimistic as economic activity evolves throughout the quarter.