The economy and the market: weekly previews, recaps, monthly summaries, and major macro events as they land.
This week’s U.S. data will test whether the economy is cooling in an orderly way or slipping faster than expected. JOLTS, ADP, ISM Services, jobless claims, mortgage rates, productivity, and Fed speeches all build toward Friday’s jobs report, with rates and markets watching inflation signals closely.
US data painted a split picture: GDP slowed to 1.5% while PCE inflation stayed stubbornly high. The Fed kept rates at 3.75% in a hawkish hold, and long-term yields surged, pushing mortgage rates higher and pressuring growth stocks, housing, and other rate-sensitive assets.
University of Michigan one-year inflation expectations fell to 4.2% in July from 4.6% in June, matching forecasts and signaling some relief for the Fed. But long-run expectations held at 3.3%, keeping policymakers cautious as consumers still see inflation as their top concern.
The Fed’s assets slipped $9 billion in the latest weekly reading, but the bigger picture is a balance sheet that has grown since runoff ended. Treasury bill purchases and reserve management have kept total assets near $6.7 trillion, while inflation and labor data remain the key rate drivers.
Freddie Mac says the 30-year fixed mortgage rate climbed to 6.66%, its highest level in a year, after four straight weekly gains. The rise is squeezing affordability, cooling applications and adding pressure to a housing market already struggling with weak demand.
The latest GDP report showed the U.S. economy still expanding, but at a weaker 1.5% annualized pace while the GDP price index surged to 6.3%. Strong consumer spending and domestic demand helped offset trade drag, but the hotter inflation reading strengthens the case for a cautious Fed.
Initial jobless claims climbed to 197,000, yet continuing claims fell and both measures beat forecasts. The mixed report points to a cooling but resilient US labor market, reinforcing the soft-landing narrative and giving the Federal Reserve little urgency to cut rates.
The MBA 30-year mortgage rate climbed to 6.76%, extending a steady July rise that keeps affordability under pressure. Even so, mortgage and purchase applications are still rising, suggesting buyers remain active but highly rate-sensitive as housing stays in a slow-growth pattern.
The Federal Reserve kept its policy rate unchanged, signaling little urgency to cut while inflation remains above target and the economy holds up. Strong labor data, resilient activity and still-high borrowing costs point to a slower easing path ahead.
The Richmond Fed Manufacturing Index rose to 5 in July, staying positive for a fourth straight month but falling short of expectations. Shipments and employment improved, while new orders softened and factory price growth eased, signaling modest regional expansion rather than a manufacturing rebound.
US consumer confidence slipped in July, missing expectations as higher gasoline prices, grocery costs and softer labor-market views weighed on households. The decline points to more cautious spending ahead, though steady jobs data and recent retail gains suggest consumers are slowing, not collapsing.
Case-Shiller data showed US home prices rose more than expected in May, with annual gains accelerating to 1.6%. But high mortgage rates, weak affordability and sharp regional splits suggest the market is stabilizing rather than rebounding, while the surprise may slightly support a cautious Fed stance.
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