Key highlights:

• We are revising up our Q2 GDP growth estimate though we still expect a downturn in the US economy (most likely H2 2023). We now see GDP growth of 1.3% (was 1.0%) in 2023 and 0.7% (was 0.9%) in 2024.
• Agreement to increase debt ceiling has been reached – but still needs to be passed by Congress – so risks have not entirely gone away. Fiscal and economic impact of the deal appears small.
•  Inflation continues to remain high without clear signs of a downtrend across the underlying measures.
• Resilience in both the activity and inflation data increases the risk that the Fed takes rates higher, although we still consider no change at the June meeting the most likely outcome.

Find out more in NAB’s US Economic Update (31 May 2023)