JPMorgan forecast ‘perilously close’ to recession after GDP cuts

JPMorgan economic and policy research analyst Michael Feroli revised down his tracking of Q2 annualized real gross domestic product growth from 2.5% to 1.0%, and his projection for Q3 from 2.0% to 1.0%. The recent trajectory for consumer spending indicates a “significant loss in momentum” through the middle of Q2, and Chase card data suggest spending growth “remained sluggish” in June, Feroli tells investors in a research note. The analyst looks for growth to “modestly accelerate” toward year-end, reaching 1.5% in Q4, due to stronger motor vehicle production and “some purchasing power relief from more modest headline inflation.” Feroli says his forecast “comes perilously close to a recession.” However, he continues to look for the economy to expand, noting that employers may be reluctant to shed workers, even in a period of soft product demand.

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