The economy and the market: weekly previews, recaps, monthly summaries, and major macro events as they land.
July producer prices were unchanged, while core PPI cooled more than expected, easing pressure on the Fed and lifting stocks to record highs. But a jump in a key services measure shows inflation is still sticky, keeping policymakers cautious despite the softer report.
The MBA’s 30-year mortgage rate eased to 6.77%, but borrowing costs remain near year-high territory. Applications are still highly rate-sensitive, keeping homebuying, refinancing and housing turnover under pressure as affordability remains the market’s biggest hurdle.
July’s CPI report matched expectations, with headline inflation rising 0.1% and core CPI up 0.2%. Annual rates eased, Treasury yields slipped, and stocks edged higher, but inflation remains above the Fed’s target, keeping policymakers in wait-and-see mode.
Small-business sentiment rebounded sharply in July, with the NFIB Optimism Index rising to 99.8 and topping its long-run average. Owners grew more upbeat on business conditions and hiring, but poor sales, labor shortages and policy uncertainty still point to a cautious recovery.
July existing home sales came in near expectations, but the 1.7% monthly drop underscored a housing market stuck by affordability pressures. Mortgage rates climbed to 6.69%, inventory fell, and prices stayed elevated, leaving buyers sidelined and the recovery still out of reach.
This week’s U.S. calendar centers on July CPI, PPI and retail sales, with markets watching whether inflation stays sticky even as consumers keep spending. The data could sway Treasury yields, the dollar and rate-sensitive stocks, while jobless claims and Fed speeches add clues on labor-market cooling and policy timing.
A weak July payrolls report signaled clear labor-market strain, but services activity stayed in expansion and price pressures jumped. Markets welcomed the softer hiring data, yet falling rate-cut odds showed investors still see stubborn inflation and resilient growth keeping the Fed cautious.
July payrolls fell by 23,000 as ADP hiring slowed and job openings declined, signaling softer labor demand. But low initial claims and a 4.1% unemployment rate suggest layoffs remain contained, leaving the Federal Reserve with less pressure to hike and no clear case for an immediate cut.
July’s 4.1% unemployment rate gave Wall Street a lift, but the details were softer: the labor force shrank, payrolls fell and underemployment stayed elevated. Markets rallied on lower Fed pressure, yet the report points to a cooling labor market rather than broad strength.
The Federal Reserve’s assets rose to $6.749 trillion, signaling that aggressive quantitative tightening has given way to reserve management. Treasury bill purchases and ample reserves are supporting liquidity, but the move is too small to change the policy-rate outlook or meaningfully ease borrowing costs.
Mortgage rates are tightening the housing market again as Freddie Mac’s 30-year average rises to 6.69%, its fifth straight weekly gain. The 15-year rate eased slightly, but affordability remains strained, with buyers still facing higher borrowing costs and weak homebuying sentiment.
Initial jobless claims came in below forecasts, signaling layoffs remain contained, but continuing claims rose above estimates, showing workers are taking longer to find new jobs. The mixed report points to gradual labor-market cooling and supports a patient Federal Reserve stance.
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