Recent US economic data does not signal an imminent recession.

Although a hard landing cannot be ruled out given the restrictive stance of monetary policy, we believe the economy is transitioning to a period of below-potential growth. July’s rise in unemployment reflected a spike in the labor force, rather than a decline in jobs created. Other releases have also generally been consistent with slowing but still positive growth.

Given stronger-than-expected real GDP data in the second quarter, we forecast GDP growth of 2.6% over 2024. New home sales declined in August, implying a decrease in residential brokers’ commissions in the third quarter, although this is unlikely to move the GDP growth needle. We forecast that the third-quarter GDP growth of the US will be at 2.3%.