The consumer drives economic growth, supported by strong disposable income growth in the second quarter. The US labor market continues to add jobs at a moderate pace, and labor force participation rates are rising. Corporate profit growth is weaker than expected as rising labor costs erode profitability in 2019. The Federal Reserve is expected to cut interest rates further due to slowing global growth, below target inflation rates, and trade policy volatility. The recent escalation of the US-China trade dispute and other geopolitical uncertainties increase the risk of a sharper slowdown than the base scenario.