Last week's GDP report shows that the U.S. economy continues to be almost exclusively driven by consumer spending. In fact, the net effects of government, investment and trade are negative.
Since private domestic investment is often equated to business spending, it is important to note here that that segment is negative due to falling residential fixed investment. All of the business related spending categories were additive to GDP. Digging deeper into the residential component, here is the year/year change:
And here is how that impacts the total reported GDP growth:
The only thing left to see is whether the slowdown in housing starts to affect the rest of consumer spending. If so, we will probably see a recession.