of the trade deficit in the second quarter likely added to GDP, consumer spending probably decelerated further.about the wherewithal of consumers to sustain discretionary spending, especially for big-ticket items. The retail heavyweight’s warning follows a similar move last month by Target Corp. as companies contend with a buildup in stockpiles of unwanted merchandise.
“One thing that we’re all watching is how swiftly underlying activity is slowing down,” said Andrew Hollenhorst, chief US economist at Citigroup Inc. “Economists can debate what a recession is, but at the end of the day, if businesses and individuals believe there is a recession that’s how they’ll behave.”
In the US, a group of academics at the National Bureau of Economic Research makes the official recession call. They define a recession as “a significant decline in economic activity that is spread across the economy and that lasts more than a few months” and look at a variety of factors to make their determination.Data released Wednesday prompted a few economists, including those at JPMorgan Chase & Co., to raise their second-quarter GDP forecasts.
. The Fed has embarked on the most aggressive tightening campaign since the 1980s and is expected to boost interest rates by yet another 75 basis points later on Wednesday.Consumer spending, the main engine of the US economy, will be the most important part of the report for many. Economists project that outlays decelerated further in the second quarter to an annualized rate of 1.2%, the weakest pace of the expansion.
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