Spending still up across most categories. After recent revisions, core retail sales rose 0.4 percent in real terms during both July and August, highlighting U.S. consumers’ resilience amid the weakening labor market and tariff-related price pressures. Spending last month was also encouraging on an annual basis, as core retail sales were up 5.4 percent. That said, the full effect of tariffs likely have yet to fully materialize…

CPI edges higher, Fed poised to ease. Inflation picked up in August, led by higher food and energy costs, while tariffs continued to gradually raise prices across other categories. Headline CPI advanced 0.4 percent month over month — the sharpest rise since January — lifting the annual rate to 2.9 percent. Core CPI increased 0.3 percent on the month and 3.1 percent year over year, underscoring the persistence of underlying cost pressures…

Much anticipated rate cut comes to pass. At its September meeting, the Federal Open Market Committee reduced the lower bound of the overnight lending rate from 4.25 percent to 4.00 percent. While this was the first rate cut since December 2024, the decision was widely expected by Wall Street. Chairman Powell characterized the change as a “risk management cut” in response to the weakening labor market, shifting the rate closer to…

Labor market weakens. Sluggish on boarding persisted in August, with nonfarm payrolls rising by only 22,000 positions as the unemployment rate edged up to 4.3 percent. The softening employment market has reinforced expectations of a rate cut by the Federal Reserve at its next meeting and put downward pressure on the 10-year Treasury. More accommodative monetary policy may provide modest relief for…

Delinquency is rising, but distress sales are uncommon. While the number of trades of financially or operationally challenged commercial properties has increased since the pandemic, these distressed transactions have not become as prevalent as after the Global Financial Crisis. A considerable slowdown in hiring during late spring and early summer, however, has brought up renewed concerns about distress. One potential indicator is the level of delinquency among CMBS loans…

Encouraging and discouraging trends at play in housing. Existing home sales increased 1.1 percent year over year in July 2025 to a six-month high, aided by a steadily climbing number of listings. The supply of homes at the current sales pace has eased back from the May high of 4.2 months, but the liquidity measure is still at one of its highest levels in more than five years. The added options for prospective buyers has… Read More

Recent spending may provide a window into months ahead. Core retail sales rose 4.4 percent on a year-over-year basis in July; however, consumers are beginning to pullback. When accounting for core CPI inflation, which rose 0.3 percent last month, core retail spending dipped 0.1 percent in July. Larger declines were registered across discretionary categories — electronics, building and gardening materials, and restaurants and bars — while necessity-based retailers — grocery and health and personal care… Read More

Topline growth in GDP resumed. Real gross domestic product rose at an annual rate of 3.0 percent in the second quarter, following a 0.5 percent drop in the prior period. Yet the change in GDP was influenced in both quarters by the front-loading of imports ahead of new tariffs. Setting that distortion aside and focusing on consumer spending, final sales to private domestic purchasers increased 1.2 percent — the lowest annual rate since late 2022…

Job growth picture re-framed in July. Employers added a net total of 73,000 positions last month, led by the health care and social assistance sectors with the creation of 55,400 and 17,900 roles, respectively. July’s hiring was overshadowed, however, by large downward revisions to figures from May and June. Combined, 258,000 fewer jobs were added than previously thought, with headcounts failing to rise by more than 19,000 in either month. Historically, employment estimates are revised…

Spending up but for select categories. While a broad-based pullback in consumer spending appeared to be materializing in April and May, the trajectory of core retail sales shifted course in June, rising 0.6 percent monthly and 4.1 percent year over year. This expectations-exceeding performance suggests that despite concerns surrounding tariffs, overall consumer health remains steadfast…