Tame Inflation Can Still Hurt Consumers
A tight labor market may not be sending prices as high as feared, but consumers will still feel the squeeze.
This week had only two economic releases of much consequence: the Consumer Price Index and retail sales. The month-to-month data in both reports looked good and suggested an accelerating economy. Indeed, the GDPNow folks in Atlanta are now seeing the potential for 3.6% growth in the second quarter following the first quarter's disastrous 0.7% rate (which is likely to be revised higher).
The consensus forecast for the second quarter is for just over 3% growth, and we are forecasting between 2.5% and 3% for the quarter. However, we still think it will be exceptionally difficult to get above 2% growth for the full year.
Robert Johnson, CFA does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.