The US economy sputtered in Q2, growing at a rate of just 1.2%/year! Consumer spending rose a strong 4.2%, exports jumped 1.4%, and real final private sales increased 4.8%. But, government spending was down 0.9%, residential fixed investment declined 6.1%, nonresidential fixed investment fell 2.2%, and inventories contracted for the 5^th straight quarter and clipped a whopping 1.16 percentage points off GDP. The 12 month forward recession probability remains 25%.