The US economy is showing signs of stabilization, according to preliminary estimates for the second quarter. The median nowcast from CapitalSpectator.com suggests that economic activity may normalize after the volatility seen post-pandemic. While there is still some uncertainty surrounding second-quarter economic activity, the estimate of a 1.9% increase in output for the April-through-June period is a slight improvement over Q1’s 1.6% advance.
However, some analysts are warning of 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, emphasizing that he does not foresee stagflation occurring.
Despite differing opinions on the outlook for the US economy, consumer spending remains a driving force behind it. Services spending has shown positive growth, and early Q2 data suggests that this trend will continue.
While there is still uncertainty surrounding second-quarter economic activity due to a lack of hard data for April and unpredictability in May and June, an overall cautiously optimistic outlook prevails as economic activity evolves throughout the quarter.
