Stock and bond prices fell slightly when the Commerce Department reported a second-quarter GDP number slightly higher than expected, and retraced back up when investors took a second look at the numbers. The headline number came in at +2.1%, lower than the first quarter’s 3.1% but still higher than the consensus 1.8% forecast. The components of GDP growth, though, show a less reassuring picture.

Of the 2.1% growth, a remarkable 0.85% came from increased government spending, about equally divided between federal spending and state plus local spending. That’s the biggest contribution of government spending to GDP growth since 2006. Very little of the gain came from defense. It’s all consumption spending.

Investment fell sharply, meanwhile, deducting 1% from GDP growth. That happened only once before in the post-crisis US economy, and that was in the third quarter of 2015, when the oil price crashed and investment in energy extraction evaporated. The second-quarter investment decline (after zero growth during the 1st quarter) stems largely from uncertainties about global supply chains due to the trade war with China.

Net of the .85% increase in government consumption, the private economy showed only 1.25% growth. That is a miserable result masked by a flood of government largesse.

According to the latest purchasing managers’ survey by Markit, US manufacturing stopped growing in July, while services are growing slowly.

Union Bank of Switzerland’s macro strategy team uses a variety of inputs to forecast short-term economic growth, and their current forecast calls for more weakness.

UBS strategists wrote in a July 26 note to clients: “The UBS Macro Nowcast signal (ELM) for July, based on big data analysis of real-time economic activity, indicates that US growth momentum may have slowed down after two months of broad data stability. Typically, when growth momentum shifts from ‘stability’ to ‘slowdown’, equity markets, high yield credit and cyclical assets /commodities performance suffers – in fact, it is the only environment where the aforementioned assets underperform outright. Such shifts also typically strongly favor IG bonds, Treasuries, defensive stocks and precious metals.”