The Commerce Department had previously estimated that the nation’s gross domestic product—the total output of goods and services—expanded at a 2.8% rate from April through June.
Consumers are still spending, but they’re being selective about where they make purchases when the costs of housing, food and other essentials remain inflated.
The government reported Wednesday that the economy created 818,000 fewer jobs from April 2023 through March 2024, in the biggest revision to federal jobs data in 15 years.
For nearly a year, cooling inflation has provided gradual relief to America’s consumers, who were stung by the price surges that erupted three years ago, particularly for food, gas, rent and other necessities.
Some of America’s largest companies say their customers are increasingly seeking cheaper alternative products and services, searching for bargains or just avoiding items they deem too expensive.
Nearly everything on Wall Street is tumbling Monday as fear about a slowing U.S. economy worsens and sets off another sell-off for financial markets around the world.
A report Friday showing hiring by U.S. employers slowed last month by much more than expected has convulsed financial markets, vanquishing the euphoria that had taken the Nikkei 225 to all-times highs of over 42,000 in recent weeks.
Friday’s report from the Labor Department showed that employers added 35% fewer jobs than forecasters had expected and the unemployment rate hit its highest level since October 2021.
Higher wages and benefits are good for employees, but slower pay growth will likely reassure Federal Reserve officials that inflation is steadily falling back to their 2% target.
American consumers felt more confident in July as expectations over the near-term future rebounded. However, in a reversal of recent trends, feelings about current conditions weakened.
Inflation has fallen steadily for the past year. Even so, the costs of everyday necessities like groceries, gasoline and rent remain much higher than they were three years ago.
The nation’s economy accelerated last quarter at a strong 2.8% annual pace, with consumers and businesses helping drive growth despite the pressure of continually high interest rates.
Despite the likely uptick, the U.S. economy, the world’s largest, has clearly cooled in the face of the highest borrowing rates in decades.
The increase, the sharpest year-over-year increase since March 2023, comes at a time when other price indicators are showing that inflation has continued to ease.
PepsiCo’s and Conagra’s latest quarterly results suggest that consumers frustrated by rising prices are now spending less on established brands, particularly in the snack and soda aisles.
The June figures will qualify as another installment of the more good inflation data the central bank has been seeking. Should inflation remain low through the summer, most economists expect the Fed to begin cutting its benchmark rate in September.
Optimism is rising among economists, investors and Federal Reserve officials that U.S. inflation is nearly under control, with the latest report on consumer prices expected to show another month of mild increases.
The unemployment rate ticked up from 4% to 4.1%, a still-low number but the highest rate since November 2021.
Despite better-than-expected job gains in May, there is some visible weakening in the labor market. Job postings for April hit their lowest level since 2021 and the number of Americans who are receiving unemployment benefits has risen for seven straight weeks.
Major drivers of the increase include higher costs from the supplemental spending package signed in April.
