Short-Term Outlook
The short-term outlook points to slower but still positive activity. Consumer demand appears firm enough to support growth, business spending is improving only gradually, and government outlays look broadly stable. Inflation is easing, but progress remains uneven across categories. Interest rates look close to steady in the near term, while trade flows remain softer than earlier in the cycle.
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Consumer Spending
Consumer spending is expected to expand modestly in the short term, supported by steady wage growth, relatively stable household balance sheets, and continued resilience in service categories such as travel, dining, and health-related spending. The degree of confidence here is moderate: the consumer still appears to be carrying the expansion, but the pace looks more selective than broad. A key risk is that softer hiring or tighter credit conditions could weaken discretionary demand faster than expected, which would reduce support for overall growth and put more pressure on business revenue expectations.