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JPMorgan Cuts Economic Growth Forecasts ‘Perilously Close’ to Recession

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JPMorgan Chase & Co. economists cut their U.S. mid-year economic growth forecasts after an influx of weaker data this week — most notably a slowdown in consumer spending.

The Wall Street bank reduced its estimate for annualized gross domestic product growth to 1% for the second quarter, down from 2.5% previously. This quarter is also seen at 1%, down from 2%.

Growth will tick up to 1.5% in the final three months of the year, helped by stronger car production and lower inflation, the bank’s economists said.

“Our forecast comes perilously close to a recession,” Michael Feroli, JPMorgan’s chief U.S. economist, wrote in a note Friday.

“However, we continue to look for the economy to expand, in part because we think employers may be reluctant to shed workers, even in a period of soft product demand,” he added.

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