What is the real GDP deflator? It's best to look at nominal gdp and use your own best judgement for the price deflator to arrive at real gdp growth. If your gdp deflator is flawed, then so will real gdp. As the old saying goes, garbage in equals garbage out.
It is clear to me that the economy is slowing down by looking specifically at nominal gdp for each of the past few quarters. To be quite fair, it is slowing down at a rabbits pace as the target for gdp growth should be 4% which is consistent with pre-covid levels with a ~ 2% inflation rate. Keep in mind that there are always further revisions down the road that can take a year to play out.
Q2 nominal gdp annualiazed =~ 5.08%
Q1 nominal gdp " =~ 4.44%
Q4 2023 nominal gdp annualized =~ 5%
Q3 2023 " " " =~ 8%
Q2 2023 " " " =~ 4%
Q1 2023 " " " =~ 6%
I forecast nominal gdp for the second half of the year to be materially lower than the second half of 2023. It's worth noting that inventory build up is a partial explanation for the improvement of gdp from the second quarter of this year compared to the first quarter. Remember that inventory that is unsold is also included in the gdp numbers which is worth noting. To keep gdp levels robust, the economy will need to absorb this excess inventory so the economy can make new purchase orders in the quarters ahead.
It is not clear to me that this is going to happen as the consumer is tapped out and the excess savings is depleted. The government has about ~ $400 billion in the reverse repo facility which tells me they too will be tapped out very soon.