Corporate earnings show trade war straining US economy as companies lean on shoppers to prop up profits

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Earnings show trade war is straining US economy as companies lean on shoppers to prop up profits

" for future cuts, meaning companies may not be able to count on borrowing at lower rates.

But strong job growth, wages that are rising — if slowly — and robust consumer spending are fueling the economy and some pockets of strong earnings. "The economy doesn't look like it's heading into a recession because the consumer is still strong," said Jeremy Zirin, head of Americas equities at UBS Global Wealth Management's Chief Investment Office.U.S. consumer spending, which drives the lion's share of the economy, is growing but at a slower pace. In June, U.S. consumer spending, down from the 0.5% monthly increase posted in May, the Commerce Department said late last month.

"The underlying U.S. consumer is doing well, making more money, they're employed and, more importantly, they're spending more money," Bank of America CEOon Tuesday, adding that the bank's own customers are spending more. "The U.S. consumer continues to spend, and that will keep the U.S. economy in good shape."

U.S. airlines, for example, which make money from flying passengers and from selling frequent-flyer miles to banks that offer rewards to customers who spend with co-branded or other rewards credit cards, are on track for a 10th consecutive year of profitability. Executives at large carriers said on earnings calls last month that the strong U.S. economy helped them grow revenues.

 

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