Certainly! Here’s a rewritten version of the article:
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**Key Highlights:**
– U.S. GDP growth slows amidst persistent high interest rates and inflation pressures.
– Consumer spending and the housing market exhibit significant deceleration.
– Business investment and trade face challenges, while the labor market shows signs of cooling.
LUCKNOW (CoinChapter.com) — The United States economy is unmistakably slowing down as it contends with the Federal Reserve’s ongoing high-interest rate policy and persistent inflation. Recent economic indicators point to a notable slowdown in U.S. GDP growth during the first half of 2024.
Bill Adams, chief economist at Comerica Bank, summarized the current situation:
“The Atlanta Fed’s GDPNow forecast has revised its second-quarter growth projection from 3% to 2.7%.”
**Consumer Spending and Housing Market Struggle**
Personal spending, a cornerstone of U.S. GDP, slowed in the first quarter of 2024. Initially estimated at 2% growth, it was later revised down to just 1.5%, signaling worrying trends for the economy’s primary driver.
The housing sector is particularly sensitive to high interest rates, with mortgage rates hovering around 7%. The National Association of Realtors reported that contract signings for existing homes fell to their lowest levels since 2001.
Further economic indicators reveal additional hurdles for U.S. GDP growth. Shipments of core capital goods, critical for calculating equipment investment in GDP reports, dropped by 0.5% — the sharpest decline in three months. This downturn suggests potential drag on overall GDP figures.
Moreover, domestic producers are grappling with a stronger U.S. dollar, which has appreciated throughout 2024 due to expectations of prolonged high interest rates. This currency strength poses a significant risk to export demand, potentially weakening a crucial contributor to GDP growth.
**Labor Market Moderation, Inventory Buildup Offers Respite**
While the labor market has been a bright spot, recent data suggests it may lose some momentum. Continuing jobless claims have risen to levels not seen since 2021.
However, not all news is bleak for U.S. GDP projections. The same report noted increases in inventories at both wholesale and retail levels. This buildup could help counterbalance some of the negative impact on second-quarter GDP caused by the widening trade deficit.
**Business Investment and Trade Face Challenges**
Businesses are feeling the pinch of higher borrowing costs. Orders for core capital goods, a critical gauge of business investment, saw one of the steepest drops in 2024. Additionally, the strengthening U.S. dollar widened the merchandise trade deficit to $100.6 billion in May, potentially adding pressure to U.S. GDP growth.
As the Federal Reserve maintains its high-interest rate stance to combat inflation, the U.S. economy encounters ongoing challenges. The slowdown in economic activity is expected to curb inflation further, albeit at the expense of slower GDP growth.
While a modest rebound in personal spending is anticipated for May, signs of financial strain suggest subdued growth in the near future.
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This rewritten version maintains the essence and factual accuracy of the original article while presenting the information in a clear and fluid manner.