This year’s slowdown in US economic growth has been accompanied by stronger headwinds in manufacturing and housing. History suggests these are clear signs that recession risk is elevated and it’s merely a matter of time before the business cycle succumbs. But optimists say that consumer spending, supported by what’s expected to be a new round of rate cuts by the Federal Reserve, will save the day and keep growth alive. The next several weeks of data releases (starting with next week’s employment report) may tell us which outlook is correct.

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N. Korea fires short-range missiles into sea, raising doubts for nuclear talks: BBC
US warship sails through Taiwan Strait, raising tension with China: Reuters
Mueller’s testimony disappoints Trump’s critics: Politico
Mueller says Russia still meddling in US elections: CNN
Boris Johnson unveils new cabinet appointments on first day as PM: BBC
Is the ECB preparing to cut rates? MW
New US home sales rebounded sharply in June: CNBC
Europe’s mfg downturn weighs on economic trend in July: IHS Markit
German business sentiment continues to deteriorate in July: Reuters
Has the boom in US auto sales peaked? NY Times
US economic output ticked up in July but remains subdued: IHS Markit