The economy and the market: weekly previews, recaps, monthly summaries, and major macro events as they land.
US jobless claims dropped across all major measures, with initial claims at 196,000 and continuing claims at their lowest since January 2024. The data point to a cooling but resilient labor market, giving the Federal Reserve more room to keep policy restrictive while inflation remains elevated.
The MBA’s 30-year mortgage rate climbed to 6.97%, its highest since May 2025, while total applications dropped 4.1%. Purchase and refinance demand both weakened as higher bond yields, inflation concerns, and restrictive Fed policy kept housing costs elevated.
Builder confidence fell to a one-year low as high mortgage rates and rising construction costs squeezed the U.S. housing market. The NAHB index dropped to 32, with weaker sales expectations, more price cuts, and heavier incentives signaling fragile new home demand.
The Federal Reserve lifted rates by 25 basis points and pushed its 2026 and 2027 forecasts higher, signaling that restrictive policy may last longer than markets expected. Strong growth, resilient hiring and sticky inflation kept the central bank focused on price pressures, sending stocks lower and the dollar higher.
U.S. retail sales rebounded sharply in August, rising 1.4% and beating forecasts across key measures. The broad-based gain signals resilient consumer demand, but it also strengthens the case for persistent inflation pressure and a more hawkish Federal Reserve stance.
New York manufacturing expanded in September, but momentum cooled sharply as the Empire State index fell to 7.6 from 20.6 and missed forecasts. The report also showed input prices at their highest in several years, keeping inflation pressure alive even as demand eased.
U.S. households are still spending, but the cushion is shrinking. August inflation accelerated, consumer sentiment sank to 47.8, and credit growth jumped, signaling a consumer that remains active but increasingly strained by higher prices, weaker confidence, and tighter borrowing conditions.
A packed September 16-18 calendar will reveal whether U.S. consumers are holding up, housing is absorbing mortgage rates above 6.5%, and the Fed is ready to tighten again. Retail sales, the FOMC decision, and key housing reports could quickly shift Treasury yields, the dollar, and rate-sensitive stocks.
Fresh PPI and CPI reports showed sticky inflation, pushing Treasury yields higher and lifting odds of a Fed hike. At the same time, consumer sentiment weakened and housing sales slipped, underscoring an economy split between solid growth and rising price pressure.
The University of Michigan’s September consumer sentiment reading fell to 47.8, while one-year inflation expectations climbed to 4.6%. The weak confidence and hotter price outlook add pressure on the Federal Reserve and keep borrowing costs elevated for households and rate-sensitive sectors.
August inflation came in close to expectations, but headline CPI still rose 0.4% and core prices stayed firm. Gasoline, airfares, wireless services and hotels kept pressure on the report, lifting market odds of a 25 bp Fed hike to about 85% and keeping yields elevated.
U.S. mortgage rates extended a three-week climb, pushing the 30-year benchmark to 6.76%, the highest in more than 14 months. The jump is squeezing affordability, cooling home sales and refinancing, even as a stable labor market keeps the broader economy from flashing recession signals.
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