Early assessments of third-quarter economic activity for the US point to slowdown vs. Q2, based on the median nowcast for a estimates compiled by CapitalSpectator.com. The downshift is prominent, but the estimate still points to low recession risk.

The economy is on track to increase at a real 2.1% annualized pace in Q3, according to the median projection. Assuming the nowcast is accurate, the growth will reflect a moderately slower expansion compared with Q2’s solid 2.8% increase. The Bureau of Economic Analysis is scheduled to publish its first round of Q3 data on Oct 30.

The obvious caveat: it’s still early in Q3 and so the current nowcasts should be viewed cautiously. A lot can, and probably will, happen between now and late-October, when the government publishes the initial Q3 GDP report. For now, however, the preliminary review provides a relatively upbeat outlook.

Today’s data also offers pushback to recent fears that a US recession has started or is imminent. In addition to today’s Q3 nowcast, a series of other business-cycle metrics support the case for downplaying recession fears in the immediate future. As reported on these pages a week ago (Aug. 7), “the case for assuming that recession risk has spiked still looks weak.”

Yet it’s also short-sighted to assume that recession risk will be low for Q4 and beyond. Looking beyond a month or two for assessing US economic conditions is highly speculative, but for scenario-analysis purposes it’s reasonable to consider what may happen and monitor the key triggers for assessing the assumptions through time.

There’s also a view in some circles that expect a sluggish growth rate will keep the US out of a formal recession but at the same time deliver subpar results that may feel like a mild downturn.

Bank of America analysts predict “we go to 2% growth, then 1.5% growth over the next six quarters and kind of bump along at that growth rate plus or minus,” says the bank’s CEO Brian Moynihan.

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