Stop if you’ve heard this story before — optimistic gross domestic product estimates at the start of a quarter aren’t looking as rosy by the end.
That’s what appears to be happening again after the latest wave of economic reports.
On Friday, the New York Fed said its “nowcast” has been reduced to 1.9% for the second quarter, down a tick from its last report, and from as high as 2.6% in April. A similar assessment from the Atlanta Fed called GDPNow fell to 2.4% from 2.6%, and is down from 4.3% in May.
Economists at IHS Markit cut their GDP estimate to 2.4% from 2.7%, Barclays cut its estimate to 2.4% from 2.5%, and Macroeconomic Advisers also cut its estimate to 2.4% from 2.5%.
The culprit was the June retail sales report. Retail sales fell 0.2% in June, the Commerce Department reported.
“In June, most retail channels were either underwater or posted anemic growth,” said Chris Christopher, an executive director at IHS.
That said, economists still have not thrown in the towel on the U.S. consumer.
“Consumer spending will remain an engine of US economic growth, supported by rising employment, real disposable incomes, and household wealth,” Christopher said.
The U.S. grew 1.4% in the first quarter. The second-quarter GDP estimate will be released by the Commerce Department on July 28.
