U.S. economic growth outlook has deteriorated over the summer, despite record-high consumer prices showing signs of a slowdown, as the new report from the Federal Reserve revealed.
The Fed said price levels "remained strongly elevated" in 12 counties from mid-June to August, though nine states reported a growth rate to moderate.
Most businesses expect high prices to persist through the year end.
Wall Street witnesses a growing consensus on the recession triggered by Fed’s inflation battle. Higher interest rates lead to higher consumer and business loans that resulted in economic slowdown with employers’ cutting spending. Mortgage rates have nearly doubled since last year, while some credit card issuers have increased their rates to 20%.
Gross domestic product (GDP), the broadest measure for goods and services produced, has already fallen for two consecutive quarters, with the economy shrinking 1.6% from January to March, and another 0.6% between April and June.
Nevertheless, overall economic activity remained unchanged over the summer, with five counties reporting a slight to moderate increase, and another five marking a slight to moderate weakening.
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