Economic Stability in Sight as US Output May Normalize After Two Slower Quarters, Despite Uncertainty Surrounding Inflation and Growth.

Economic activity in the US may stabilize after two consecutive quarters of slower growth, according to preliminary estimates. The median nowcast compiled by CapitalSpectator.com suggests that economic output could be on track to normalize following the volatility seen post-pandemic. While there is still uncertainty surrounding second-quarter economic activity due to the lack of hard data for April and the unpredictability of May and June, some analysts are warning of rising risk of stagflation in the US, where inflation remains high while economic growth slows.

Despite differing opinions on the outlook for the US economy, Federal Reserve Chairman Jerome Powell dismissed this risk earlier in the week, emphasizing that he does not foresee stagflation occurring. However, 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, the overall outlook remains cautiously optimistic as economic activity evolves throughout the quarter.