Continued employment growth, while slowing, together with disposable income growth is supporting consumer spending. Unemployment remains low, labor force participation rates are rising, and labor markets are still getting tighter. Weakness in the manufacturing sector has not yet spilled over to the rest of the economy. The Federal Reserve is expected to cut interest rates in September due to slowing global growth, trade policy volatility, and below target inflation rates. Trade disputes and other geopolitical tensions are increasing the risk of a sharper slowdown, but our baseline scenario avoids a recession.