US growth fears heighten as JP Morgan slashes second quarter forecast to less than one per cent

Following a day of mixed US data and lowered forecasts by Goldman Sachs and Deutsche Bank, JP Morgan has announced that it is now anticipating second quarter GDP growth of less than one per cent.

US retail sales came in at just half the pace forecast in June, while data from the New York manufacturing index and business inventories was slightly more positive.

Despite the bad news, the bank says that it expects a "substantial" rebound in the third quarter, with a forecast of 2.5 per cent growth.

US retail sales just half the pace forecast in June - See more at: http://www.cityam.com/live-blog#sthash.S00aMZWE.dpuf

Michael Moran, Daiwa Capital Markets America on today's business inventories data:

The average gain so far in the second quarter is lighter than that in Q1, suggesting a negative contribution from inventory investment to GDP growth, but adjustments made to the raw data before adding them to GDP suggest a roughly neutral influence on economic growth. This figure, along with other data, lead us to look for GDP growth of approximately 1.0 percent in Q2 (although upcoming reports also will have a bearing on activity in the second quarter).