World's biggest economy dangerously close to recession analysts

RT.com
02 Jul 2022, 19:19 GMT+10

JPMorgan Chase slashes its growth forecast for the US as consumers curb their spending

JPMorgan Chase has revised its midyear US growth outlook, sharply lowering expectations for second-quarter annualized real GDP growth to 1% from 2.5%, Bloomberg reported on Friday.

The largest US bank also cut its projection for the third quarter to 1% from 2%. However, growth is expected to tick up to 1.5% in the final three months of the year, boosted by robust car production and lower inflation, JPMorgan analysts said.

The downgrade comes amid a tightening of monetary policy, as the US Federal Reserve responds to inflation with aggressive interest rate hikes. The Fed raised the key interest rate by 0.75 of a percentage point in June.

The gloomy forecast followed an influx of weaker data earlier this week that showed that US consumer spending rose less than expected in May, as motor vehicles remained scarce. Meanwhile, higher prices forced cutbacks on purchases of other goods.

"Our forecast comes perilously close to a recession," Michael Feroli, JPMorgan's chief US economist, said in a note seen by the agency.

"However, we continue to look for the economy to expand, in part because we think employers may be reluctant to shed workers, even in a period of soft product demand."

For more stories on economy & finance visit RT's business section

(RT.com)

Watch latest videos

News RELEASES

Publish news of your business, community or sports group, personnel appointments, major event and more by submitting a news release to Kolkata Sun.

More Information

27 ℃

Light Rain in Kolkata/Bose

International

Section

Critical of media, Solomon Islands weighs taking over broadcaster

SOLOMON ISLANDS: In a move that opponents said is aimed at controlling and censoring the media, the government of the ...

Accidental airbag explosion blamed for 20th US deaths

WASHINGTON D.C.: In July, a Florida man was killed by exploding Takata airbag inflators, possibly becoming the 20th death in ...

After series of assassinations, Israel says it has eliminated all IJ leaders

Israel has launched an unprovoked war against the Palestinian resistance group Islamic Jihad. The Israeli army assassinated a high-ranking commander ...