Part 5/10:
- Softening Demand: Both domestic and international demand for manufactured goods has softened, further dampening manufacturing activity.
The combination of these factors signal the potential for prolonged economic stagnation, underscoring fears of stagflation, where inflation persists despite sluggish growth.
The Housing Market's Deterioration
The U.S. housing sector, which has historically been sensitive to interest rate shifts and economic sentiment, is also showing concerning signs. After a 4.5% rise in home prices during the first quarter of the year, experts forecast a significant slowdown in 2025. Growth is expected to slow to just 1% by the year's end—its slowest pace in six years—and annual growth could drop to 1.8%, the weakest since 2011.