The U.S. economy is starting to slow under the combined weight of soaring inflation and climbing interest rates—including the highest mortgage rates since 2008.
Recent reports show sharp declines in key sectors, raising the prospects of a stalled economic recovery and possibly a recession.
Home construction across the U.S. fell sharply in May, the Commerce Department said Thursday.
Factories in the mid-Atlantic region reduced activity for the first time in two years this month, the Federal Reserve Bank of Philadelphia said
And Americans broadly cut spending at retailers for the first time this year in May, the Commerce Department said earlier this week.
Economists have slashed their projections for second-quarter output growth in recent days.
One closely watched forecast—the Federal Reserve Bank of Atlanta’s GDPNow tracker—estimates that gross domestic product is on track to remain unchanged at an annual rate over the three months through June 30.
Those figures suggested that persistent supply shortages, a 40-year high in inflation and the Federal Reserve’s aggressive efforts to tame price pressures by raising interest rates are cooling the world’s largest economy.
The Fed on Wednesday raised its benchmark interest rate by 0.75 percentage point, the biggest increase since 1994, and signaled further increases this year.