Economy
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A Quarter-Point Is Already Priced. The September Dot Plot Is What the Fed Still Has to Decide
Futures put roughly nine-in-ten odds on the Federal Open Market Committee lifting its target range on Wednesday, and 86 of 101 economists in a Reuters poll agree. The open question is what the Summary of Economic Projections says about everything after that — and whether an inflation problem driven by gasoline justifies a policy rate aimed at core.
Consumer Sentiment Falls to 47.8 in September's Preliminary Read as Year-Ahead Inflation Expectations Jump to 4.6%
The University of Michigan's expectations component did nearly all of the damage, dropping 5.7 points while current conditions slipped 1. The reading landed the same morning the BLS reported gasoline accounted for over a third of the monthly all-items CPI increase.
Wholesale prices rose 0.4% in August, with diesel behind more than a third of the goods increase
The Bureau of Labor Statistics said Thursday that final demand producer prices rose 0.4% in August on a seasonally adjusted basis and 5.4% over the 12 months before adjustment, with the goods side up 1.1% and the services side up just 0.1%. The BLS traces more than a third of the goods increase to diesel fuel, which jumped 24.1% — a cost that sits inside freight, farming and construction bills rather than on a store shelf.
A 1930 statute nobody had used is now setting tariffs on Canada. Friday's CPI will barely register it.
The 50 percent Section 338 duties took effect Aug. 22, leaving only the last ten days of the August price collection window. Canada's dollar-for-dollar answer landed Tuesday, and it does not touch US consumer prices directly at all.
Small business optimism slipped to 98.7 in August as the uncertainty gauge stayed 21 points above normal
The NFIB index released Tuesday gave back 1.1 points from July's reading, which the trade group called the highest since August 2025, but held above its 52-year average. The survey's uncertainty reading fell to 89, still far above its long-run level of 68.
Payrolls Rose 162,000 in August, and July's Reported Job Loss Was Revised Into a Gain
The Bureau of Labor Statistics reported a hiring gain roughly three times what forecasters expected and lifted June and July by a combined 55,000. The unemployment rate was unchanged at 4.1%.
Services Activity Accelerates in August While ISM's Price Gauge Climbs to Its Highest Since 2022
The Institute for Supply Management's services index rose to 55.4% in August, with business activity at its strongest reading since late 2022. Its prices measure climbed to 72.6% and its employment gauge contracted for a second straight month.
Trade Gap Widens 24% to $88.6 Billion in July as Capital-Goods Imports Hit a Record
Computers, computer accessories and semiconductors tied to the AI buildout pushed capital-goods imports to $140.3 billion. The Atlanta Fed's tracker now shows net exports subtracting more than a percentage point from third-quarter growth.
ADP Puts August Private Payroll Growth at 38,000, Below the 48,000 Economists Expected
The payroll processor's August tally came in about 10,000 below the consensus estimate reported by Fox Business, which did not identify the survey compiler. Manufacturing and professional services shed positions, and education and health services alone added more than the entire net gain. The report is a private-sector estimate built from ADP's own client payrolls, not a preview of the Bureau of Labor Statistics count due Friday, and the two series have diverged sharply in recent months.
Factory Growth Cools to 54.6% in August While July Job Openings Edge Up to 7.27 Million
The ISM Manufacturing PMI slipped a full point from July's 55.6% and undershot the Reuters consensus, with new orders and backlogs leading the decline. The Prices Index did not budge from 71.1%, and a separate Labor Department survey showed job openings holding roughly flat on the month.
Jobs Week Opens With a Hike Roughly Half-Priced: JOLTS and ISM Tuesday, August Payrolls Friday
The Bureau of Labor Statistics is scheduled to publish July job openings on Tuesday and the August Employment Situation at 8:30 a.m. ET on Friday, September 4. July payrolls fell 23,000 and May and June were revised down by a combined 103,000, leaving the first full data week of September to test a Fed at which three of the twelve voters already wanted to tighten in July.
Warsh Uses First Jackson Hole Speech to Warn the Fed Has "Work to Do" on Inflation; Rate-Hike Odds for Next Month Rise to 50% From 35%
The Fed chair told the Kansas City Fed's symposium that 2 percent is a firm, fixed target and that the central bank bears responsibility for 65 months of elevated inflation. Short-dated Treasury yields rose intraday as futures repriced.
Initial Claims Fell to 203,000 and Continuing Claims Dropped to 1.78 Million, a Day Before the Payroll Benchmark Revision
The insured unemployment rate stayed at 1.2% in Labor Department data released Thursday. The figures measure people losing jobs, not people finding them, and Friday brings a much larger revision to the payroll record.
Core PCE inflation held at 3.3% in July as real consumer spending barely moved
The Bureau of Economic Analysis released July personal income and outlays and the second estimate of second-quarter GDP at 8:30 a.m. Eastern on Wednesday, with the Census Bureau's advance durable goods report out the same morning. Real spending rose less than 0.1 percent, the saving rate sat at 3.0 percent and second-quarter growth stayed at a 1.5 percent annual rate.
Consumer Confidence Slipped to 89.4 in August. The Part About Today Got Better and the Part About Tomorrow Got Worse.
The Conference Board's headline index fell 0.8 points, but the Present Situation Index rose to 121.2 while the Expectations Index dropped to 68.2. More consumers said jobs were plentiful; fewer expected their income to rise.
50% U.S. Tariffs on About $20 Billion of Canadian Goods Took Effect Aug. 22; Ottawa Says Matching Duties Begin Sept. 8
Three days of talks in Washington collapsed late Friday, and duties of 50% on roughly $20 billion of Canadian products — about 5% of Canada's exports — took effect at 12:01 a.m. ET Saturday, Aug. 22. Prime Minister Mark Carney says Canada will match them dollar for dollar starting Sept. 8, a date still ahead. Two-way goods trade ran to $376 billion in the first half of 2026, and the first inflation reading whose reference month overlaps the new duties will not arrive until late September.
Initial claims fell 6,000 to 206,000. The four-week average rose anyway. The rolling window, not the labor market, explains the contradiction.
The Labor Department's August 20 release showed seasonally adjusted initial claims down 6,000 to 206,000 while the four-week moving average rose 4,250 to 204,000. The week that dropped out of the window carried 189,000 claims, a figure the department's own table prints — 17,000 below the week that replaced it, and 17,000 divided by four is exactly the 4,250 move.
The Philadelphia Fed's six-month outlook index is the highest since August 1983. Its current price gauges fell — but not one firm reported paying less.
August's Manufacturing Business Outlook Survey put current general activity at 47.4, a five-year high, and future general activity at 73.6, which the bank calls its highest reading since August 1983. Prices paid fell 13 points to 40.9, yet zero percent of respondents reported a decrease, and the forward prices-paid index sits 22 points above the current one.