The US headline GDP looks good but the underlying truth sucks.

Let's break down the GDP numbers to see what had happened.

GDP growth = G + I + C + NE

Q1 GDP (Final estimate) = (-0.1) + 3.9 + 0.31 + (-4.61) = -0.5

Q2 GDP (1st estimate) = 0.08 + (-3.09) + 0.98 + 4.99 = 2.96 (3)

From the above comparison between the 2 quarters, we can see that the government spending (G) has only a marginal increase.  However, there are significant changes in investment (I) and net export (NE).  The I has a significant drop that shows previous front-loaded inventories to avoid the higher tariffs are being depleted without massive replenishment.  We can see that the NE has a big increment that indicates overwhelming exports but underwhelming imports.

In layman's terms, export means past demand and import means future demand.  When there are overwhelming exports but underwhelming imports, we can deduce that the future outlook is very dour because the producers are just fulfilling past orders for deliveries without getting many new orders that ensue underwhelming imports to produce goods.

Why are the producers unwilling to import more to produce more goods?  This may indicate weak consumer demand ahead as there is no significant increase in consumption (C).