US Economy Growing Slower Than Expected

Signs of a slowdown in the US economy are starting to develop. According to data release by the Commerce Department on August 30, the US economy grew by 2.1% in the second quarter, falling short of the forecast that expected a 2.4% growth. In the first three months of 2023, GDP increased by 2%.

Growth in real spending by citizens also slowed down: +1.7% compared to +4.2% in the previous quarter, while corporate profits rose from -5.9% to +1.6%.

The labor market showed a slowdown on a monthly basis, with 177,000 private-sector jobs created in August, compared with almost twice as many at 324,000 in July. Analysts had expected 195,000 new employed in August.

Instead, the PCE (Personal Consumption Expenditure) index rose by 2.5% compared to the expected 4.1%. This index measures private spending and helps evaluate price changes. The core PCE index that excludes less-volatile components such as fresh food and energy showed +3.7%, compared to the expected +3.8%.