Latest economic data hints at new era of slower growth

Recent economic reports have repeatedly fallen short of expectations, suggesting slower growth is here.

Driving the news: Friday's report on industrial production failed to match consensus Wall Street forecasts. Factory output declined 0.1% in May. (The forecast was for 0.4% growth.)

The big picture: We're beginning to see a pattern.

• A Thursday report showed housing starts dropped 14.4% in May, compared to April. (Experts expected just a 0.2% decline.)
• The day before, we learned retail sales unexpectedly dropped 0.3% from April to May. (Forecasts called for a 0.2% gain.)
• And the June 10 Consumer Price Index for May showed inflation worsening: Prices rose 8.6% year over year. (Analysts thought it would be just 8.2%.)

Go deeper: In fact, economic data is now falling short of expectations by more than we've seen since the initial shock of the COVID crisis, according to the Citi U.S. Economic Surprise Index.

• How it works: Citi surprise indexes show how economic data compares with consensus expectations.
• Higher numbers mean data has been better than expected; lower numbers, worse.

The bottom line: The Fed is raising rates to slow the U.S. economy and rein in inflation. The slowdown seems to be coming.