U.S. GDP growth expected to be strong when delayed data arrives; Midwest economy mostly flat

Despite delayed government economic data, unofficial estimates of GDP mostly show strong growth (possibly as high as 4% though some estimates are lower) on the strength of consumer spending and improving trade data. Inflation continues to be higher than the Federal Reserve's target, casting doubts on any further interest rate cuts this year. However, recent evidence suggests that inflation will come down once the economy adjusts to higher tariff levels.

The Midwest economy continued to lag the national economy. Payroll jobs were down in the Quad Cities compared to a year ago. Unemployment rates in the region ticked up slightly. Housing prices continue to rise in contrast to many areas of the country where a real estate slowdown is becoming more evident. Our Business Outlook Survey respondents have a negative outlook for the U.S. economy over the next six months, but a slightly more optimistic view for their own businesses. A majority of respondents note negative effects on their business due to higher tariffs, and over 1/3 of respondents reported altering business decisions in response to the tariffs this year.

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