The US economy has shown a stronger-than-expected recovery in the June quarter, prompting Janus Henderson to suggest that recession predictions may be premature. According to Lara Castleton, US head of portfolio construction and strategy at Janus Henderson, the preliminary second-quarter GDP figure of 3.0 per cent signals a robust economy, a significant turnaround from the 0.5 per cent contraction in the March quarter. Janus Henderson is a global asset manager, dedicated to helping clients define and achieve superior financial outcomes through differentiated insights, disciplined investments, and world-class service. With assets under management exceeding $334.7 billion, the firm serves individual and institutional investors worldwide.
Ms. Castleton noted that the rebound surpassed market expectations and countered earlier concerns arising from US government tariff announcements. While trade dynamics did affect GDP during the first half of 2025, the data indicates that growth remains above recessionary levels. Personal consumption significantly contributed to the headline figure, increasing by 1.4 per cent. However, she identified weaker business and residential fixed investment as potential indicators of softening domestic demand.
“The consumer is still strong on the surface,” Ms. Castleton stated, emphasising the need to carefully analyse the data to ensure sustainable growth for the remainder of the year. She highlighted AI infrastructure and fiscal spending under the OBBA as potential positive factors. However, she added that investors would likely maintain focus on the labour market and household spending, which are currently “resilient but showing cracks beneath the surface”.
Ms. Castleton anticipates that the Federal Reserve will likely maintain its current position and cautioned investors against assuming excessive interest rate risk. “Investors should be wary of extending duration beyond the belly of the curve in preparation for the doomsday that hasn’t materialised.”
