Heating Up: August 11 – 15

Inflation picked up in July. Here are the five things we learned from U.S. economic data released during the week ending August 15.

Services pushed consumer prices higher in July. The Consumer Price Index (CPI) grew a seasonally adjusted 0.2 percent, down from June’s 0.3 percent advance. The Bureau of Labor Statistics measure has risen 2.7 percent over the past year. Energy prices fell 1.1 percent (gasoline: -1.1 percent), while food CPI held steady. Net of both, core CPI rose 0.3 percent during the month (its biggest gain since January) and 3.1 percent over the past year. Services CPI swelled 0.4 percent, with 0.8 percent gains for both transportation and medical care services and a 0.4 percent increase for shelter. Commodities CPI increased 0.2 percent, with used cars/trucks up 0.5 percent, both apparel and medical care commodities growing 0.1 percent, and new vehicle prices unchanged.

Wholesale prices surged in July. The Producer Price Index for final demand swelled a seasonally adjusted 0.9 percent. This was the Bureau of Labor Statistics measure’s largest single-month increase since June 2022. The core measure, which nets out energy, food, and trade services, jumped 0.6 percent (also a three-month high). Goods PPI increased 0.7 percent, with food (+1.4 percent), energy (+0.9 percent), and core goods (+0.4 percent) all rising. Services PPI was up 1.1 percent, including gains for trade services and transportation/warehousing of 2.0 percent and 1.1 percent, respectively. Headline PPI has risen 4.4 percent over the past year, and the core index was up 2.8 percent over the same period.

Retail sales grew in July. Retail and food services sales rose 0.5 percent to a seasonally adjusted $726.3 billion, leaving the Census Bureau measure up 3.9 percent over the past year. Retail sales between May and July also were 3.9 percent ahead of their 2024 comparables. Sales at auto dealers/parts stores jumped 1.7 percent, and gas station sales increased 0.7 percent. Net of both, core sales gained 0.2 percent during the month and 4.4 percent from a year earlier. The May through July comparable was +4.6 percent versus a year ago. During the month, sales improved at retailers focused on furniture (+1.4 percent), sporting goods (+0.8 percent), apparel (+0.7 percent), groceries (+0.4 percent), and health/personal care (+0.4 percent). Sales declined at building material retailers, electronics/appliance stores (-0.6 percent), and restaurants/bars (-0.4 percent).

Manufacturing activity remained stuck in July. The Federal Reserve reports manufacturing production was unchanged on a seasonally adjusted basis after having grown 0.3 percent in June. Durable goods production rose 0.3 percent, while that for nondurables fell 0.4 percent. Overall industrial production slipped 0.1 percent in July after having increased 0.4 percent during the previous month. Mining and utilities output declined 0.4 percent and 0.2 percent, respectively. Over the past year, manufacturing and overall industrial production have each grown 1.4 percent. Manufacturing capacity utilization of 76.8 percent was 1.4 percentage points below the 53-year average of 78.2 percent.

Consumer confidence slipped in early August. The University of Michigan’s Index of Consumer Sentiment lost 3.1 points to a seasonally adjusted 58.6 (1966Q1=100). The index was 13.7 percent below its year-ago reading. The current conditions index slumped 7.1 points to 60.9 (0.7 percent versus August 2024), while the expectations measure shed a half point to 57.2 (-20.7 percent versus August 2024). Consumers’ expectations around inflation grew, with one-year anticipated inflation at +4.9 percent (compared to +4.5 percent in July) and long-term inflation at +3.9 percent (compared to 3.4 percent in July). The press release notes, “consumers continue to expect both inflation and unemployment to deteriorate in the future.”

Other U.S. economic data released over the past week:

• Jobless Claims (Week ending August 9, 2025, First-Time Claims, seasonally adjusted): 224,000, -3,000 vs. the previous week, -4,000 vs. the same week a year earlier). 4-week moving average: 221,750 (-6.2% vs. the same week a year earlier).
• Import Prices (July 2025, All Imports, not seasonally adjusted): +0.4% vs. June 2025; -0.2% vs. July 2024. Nonfuel Imports: +0.3% vs. June 2025; -0.9% vs. July 2024.
• Export Prices (July 2025, All Exports, not seasonally adjusted): +0.1% vs. June 2025; +3.4% vs. July 2024. Nonagricultural Exports: +0.1% vs. June 2025; +2.0% vs. July 2024.
• Business Inventories (June 2025, Manufacturers’ and Trade Inventories, seasonally adjusted): $2.660 trillion (+0.2% vs. May 2025; +1.6% vs. June 2024).
• Monthly Treasury Statement (July 2025, Fiscal Year-To-Date U.S. Government Budget Deficit): -$1.629 trillion (vs. -$1.517 trillion over the 1^st 10 months of FY2024).    

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