The United States consumption figure seems robust. An 0.9 percent rise in personal spending in April looks good on paper, especially considering the challenges that the economy faces. This apparently strong figure is supporting an average consensus estimate for the second-quarter gross domestic product (GDP) of 3 percent, according to Blue Chip Financial Forecasts.
However, the Atlanta Fed GDP nowcast for the second quarter stands at a very low 1.9 percent. If this is confirmed, the United States economy may have delivered no growth in the first half of 2022 after the decline in the first quarter, narrowly avoiding a technical recession.
“For the Lord your God will bless you just as He promised you; you shall lend to many nations, but you shall not borrow; you shall reign over many nations, but they shall not reign over you.” Deut. 15:6
The evidence of the slowdown is not just from temporary and external factors. Consumer and business confidence indicators present a less favorable environment than the expectations of an optimistic market consensus. According to the Focus Economics aggregate of estimates, the United States economy should grow a healthy 3.6 percent in 2022, helped by very strong third and fourth quarters, at 4.9 percent and 5.5 percent growth, respectively. The main driver of this surprisingly resilient trend is the unstoppable consumption estimates. However, there are important clouds on the horizon for the American consumer.We cannot forget that consumer figures have been relatively solid, but at the same time, there has been a collapse in saving, with the personal saving rate falling from 8.7 percent in December to a fourteen-year low of only 4.4 percent in April.
