70% of GDP is consumer demand.
75% of that consumer demand is spent on services.
Maybe sentiment is negative, maybe credit card debt is increasing, but there's still tons of consumer spending on services, and a lot of our jobs are services.
So are we seeing cracks in there? Has the Fed done their job yet?
After contracting at an annualized rate of 1.6% in Q1, GDP shrunk in Q2 by 0.9%.
The reason inventories reduced the Q2 GDP by two points. Similarly, net exports boosted GDP by 1.43 points after reducing it by 3.23 points in Q1.
This is a weakened economy, that's not in a recession yet.
Inflation is high and the cost of goods are high. Consumers are still paying for expensive goods because they can and they haven't lost their jobs yet.