Washington
Cnn
–
Bad news for the American economy travel fast, but examples of a slow economy are potentially blown out by proportion.
Consumer spending fell in January for the first time in nearly two years, a real -time forecast of economic growth recently returned negatively, the housing market was at a slow start this year, and the air is widespread due to President Donald Trump’s rapid and rapid.
The last survey of the Consumer Conference Board even showed that the part of respondents waiting for a recession in the next year was thrown in February at a nine -month high.
But data on the beginning of the year were reduced by temporary forces, such as extremely harsh weather and fires. Basic bases remain solid: employers continue to add to work at a healthy pace, unemployment has stayed low and wages are still overcoming inflation.
And it is true that Americans are Feeling anxious because of Trump’s tariffs, but the feeling is not great to predict future spending behavior.
However, a cause for concern: The Fed has not yet been made by bringing target inflation, and the threat of a global trade war caused by the Trump administration can achieve consumption prices further.
“The request is showing some clashes around the edges, but it is not accumulated enough to be a significant risk of a drop.” Vincent Reinhart, chief economist at BNY Investments, told CNN. “Inflation is still a major advantage.”
In January, large United States Swaths collapsed by heavy winter storms; In southern California, deadly fires destroyed neighborhoods.
These events are likely to curb economic activity that month, economists say: consumer spending ranged 0.2%, according to government data, as house construction decreased 9.8%. This caused a real -time forecast of economic growth by the Federal Bank of Atlanta reserves to show the economy by contracting a 2.4% sharp in the current trimester. (Numbers will almost certainly change in government official evaluation of GDP for the first quarter, due to April.)
“We have only received data for the beginning of the quarter, and that the GDP tracker adds to new data as we go together,” so numbers can be affected by a large decline, said Blake Gwinn, head of the US Norm Strategy at the RBC Capital Markets. “It will only go out.”
St. Louis Fed President Alberto Musalem said in a speech on Monday that the approximate weather is likely to have the culprit behind the buyers to withdraw earlier this year, which is why he still thinks “prospects for constant growth look good”.
“Part of my optimism about economic activity stems from the labor market, where conditions remain strong,” Musalem said.
The US economy added 151,000 jobs last month, the job department said on Friday, as average profits per hour continued to grow faster than inflation. Unemployment increased the highest in February, but remained relatively low.
What about economic jeans?
Fed Chairman Jerome Powell said Friday that he is not very worried for one reason: “Reading feelings have not been a good predictor of consumer increase in recent years.”
Some Federal Reserve officials have recently noticed economic uncertainty and signs of slower growth. But none of them mentioned the recession concerns.
On the contrary, some of them indicated the risk of inflation to return again if the tariff spits between the United States and its three largest trading partners out of control. Trump has imposed additional taxes on Chinese imports and applied – and then suspended – increased taxes on Canadian and Mexican imports. Revenge and harsh rhetoric has escalated trade tensions between countries-a fast back and forth fire given to whiplash consumers and businesses.
“Based on what we know today, given all the uncertainties about this, I do a factor in some tariff effects now on inflation, prices because I think we will see some of those effects later this year,” New York Fed John Williams said Tuesday at a Bloomberg event.
Fedelfia President Fed Patrick Arcker said Thursday at a Philadelphia event that the “pressures are building” the price and that the progress that the Fed has so far seen in alleviating inflation is “in danger”.
The Fed stopped lowering interest rates in January precisely because there was little progress in the inflation front in the last months of 2024. Tide has not returned to the Fed to consider lowering borrowing costs again at any time soon, with Wall Street Betting that will maintain stable rates later this month, according to future.
“With the hazards of inflation firmly placed in the conditions of the upper market and the still generally solid labor market, we believe that a reactive FED will hold a waiting and viewing approach in the coming months and expect only two decreases of the Fed rate in 2025, in June and December,” said Lydia Boussour, elderly in Ernst & Young.