Golsby
On Tuesday, I was struck by comments from Chicago Fed President Austin Goolsbee. He took a more cautious stance on the economy, saying he sees “some warning signs of weakness in the real economy.”
He also spent the past year talking about the possibility of a “golden path” or soft landing, but he sounded more cautious, saying it was “still possible.”
Goolsbee is a dove, so it doesn’t surprise me that he was among the first to highlight growth concerns, but here are two charts that highlight the shift in the economy.
1) Bloomberg US Economic Surprise Index
Bloomberg and Citi have similar indicators that measure economic data against consensus expectations. On Wednesday, the Institute for Supply Management’s services-sector numbers came in well below expectations, helping push the gauge to a nine-year low, a sign that economists were very pleased with growth.
2) Federal Reserve Bank of Atlanta GDPNow
The second chart that paints the same picture is the latest set of updates from the Atlanta Fed’s GDP tracker for second-quarter growth. The quarter is now over and we’re just three weeks away from the first reading of GDP. In just two weeks, the gauge has been cut in half to 1.5%.
I’m closely watching more corporate commentary on slowing demand, and Friday’s nonfarm payrolls report is sure to be a key read on the health of the economy.