Cooling Off: August 10 – 14

Inflation took another month off in July. Here are five things we learned from U.S. economic data released during the week ending August 14. 

Consumer prices modestly edged up in July. The Consumer Price Index (CPI) increased by a seasonally adjusted 0.1 percent, reversing the 0.4 percent decline in the Bureau of Labor Statistics measure in June. Consumer prices have risen 3.4 percent over the past year. Prices for both food (-0.1 percent) and energy (-1.5 percent) declined, including a 2.9 percent drop in gas prices. Net of both, core CPI grew 0.2 percent in July and 2.5 percent over the past year. Prices rose for medical care services (+0.6 percent), used cars/trucks (+0.4 percent), transportation services (+0.3 percent), shelter (+0.1 percent), and new vehicles (+0.1 percent). Prices of medical care commodities dropped 0.6 percent. 

Wholesale prices were steady in July. The Producer Price Index (PPI) for final demand was unchanged after slipping 0.1 percent in June. The Bureau of Labor Statistics’ core wholesale price index (net of food, energy, and trade services) jumped 0.4 percent. Wholesale prices for energy (-3.1 percent) and food (-0.9 percent) declined, while core goods PPI inched up 0.1 percent. Services PPI increased 0.2 percent. Both the headline and core PPI measures have surged 4.7 percent over the past 12 months.

Retail sales slumped in July. Retail and food services sales sank 0.6 percent to a seasonally adjusted $736.6 billion. The Census Bureau reported that sales over the three-month span of May to July were up 6.3 percent from the same period in 2025. A drop in prices at the pump lowered gas station sales by 0.9 percent, while auto dealers and parts stores saw sales decline by 2.0 percent. Net of both, core retail sales fell 0.2 percent during the month, with May–July sales 5.5 percent ahead of the same period in 2025. Sales increased at retailers focused on apparel (+1.9 percent), health/personal care (+0.7 percent), furniture (+0.3 percent), and building materials (+0.3 percent). Restaurants/bars posted a 0.5 percent sales gain. Sales declined 0.5 percent at electronics/appliances stores.

Home sales slipped in July. The National Association of Realtors reports that existing home sales decreased 1.7 percent to a seasonally adjusted annualized rate (SAAR) of 4.060 million. Sales were 0.6 percent above year-ago levels. Sales increased in the Northeast (+2.0 percent), dropped in the South (-3.1 percent) and the Midwest (-2.0 percent), and held steady in the West. There were fewer homes available for sale: inventories contracted 1.9 percent to 1.540 million homes (-0.6 percent versus July 2025 and equivalent to a 4.6-month supply). The median sales price of $434,100 was up 2.0 percent from a year earlier. 

Consumer sentiment took a step back in August. The Index of Consumer Sentiment declined 4.2 points to a seasonally adjusted 51.0 (1966Q1=100). The University of Michigan measure was 12.4 percent below year-ago levels. The current conditions index lost 3.0 points to 51.8 (-16.0 percent versus August 2025), while the expectations index slumped 4.8 points to 50.6 (-9.5 percent versus August 2025). One-year inflation expectations edged up by a tenth of a percentage point to +4.3 percent, with long-term inflation expected at +3.3 percent. The press release noted that this month’s drop in sentiment came mostly from “older consumers, lower-income consumers, and those without a college degree.”

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

• Jobless Claims (Week ending August 8, 2026, First-Time Claims, seasonally adjusted): 209,000 (+9,000 vs. the previous week, -15,000 vs. the same week a year earlier). 4-week moving average: 199,000 (-10.3% vs. the same week a year earlier).
• Business Inventories (June 2026, Manufacturers’ and Trade Inventories, seasonally adjusted): $2.740 trillion (Unchanged vs. May 2026; +3.0% vs. June 2025).
• Monthly Treasury Statement (August 2026—1^st 10 Months of FY2026, Federal Government Budget Deficit): -$1.799 trillion (+10.5% vs. 1^st 10 Months of FY2025).
• Small Business Optimism Index (July 2026, Index (1986=100), seasonally adjusted): 99.8 (June 2026: 97.4; July 2025: 100.3).
• Mortgage Delinquency (2026Q2, One-to-Four Unit Delinquency Rate, seasonally adjusted): 4.37% (-7 basis points vs. 2026Q1; +44 basis points vs. 2025Q2).

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