“We continue to expect below-trend growth in the coming quarters, given a mixed bag of leading indicators and restrictive monetary policy,” S&P Global said in a release.

“Any further short-run cyclical boost to spending growth is limited by the economy's underlying growth potential. The manufacturing sector shows green buds of cyclical rebound, but not without conflicting signals, it said.

Key risks include conflicts in the Middle East and a potential resurgence in inflation that would threaten the Federal Reserve's expected monetary easing, it noted.

Risks to real US gross domestic product (GDP) growth based on financial conditions deteriorated slightly since S&P Global’s January publication after improving in the second half of last year, but remains near historically normal levels.

S&P Global anticipates year-on-year (YoY) GDP growth will soften more as the year progresses to about 1.8 per cent by year-end. The underlying potential of the economy limits the sustainability of further high growth.

The University of Michigan's preliminary consumer sentiment index (MSCI) of May dropped by 8.1 points to a six-month low of 69.1 from 77.2 in April. A similarly intense drop was last seen almost two years ago in June 2022 when the sentiment fell to 50 from 58.4.

Fibre2Fashion News Desk (DS)