Summer Expansion: August 17 – 21

The U.S. economy may have perked up mid-summer. Here are five things we learned from U.S. economic data released during the week ending August 21. 

Forward-looking measures suggest economic activity may be picking up. The Conference Board’s Leading Economic Index (LEI) grew 0.2 percent to 99.5 (2016=100). The LEI has increased 0.2 percent over the past six months, an improvement over the 1.2 percent drop during the final six months of 2025. Seven of ten LEI components made positive contributions, led by jobless claims, building permits, and the interest rate spread. The Coincident Economic Index (CEI) increased 0.2 percent to 114.8 (+0.5 percent over the past six months). Three of four CEI components made positive contributions: personal income, industrial production, and manufacturing/trade sales. The Lagging Economic Index (LAG) rose 0.2 percent to 120.4 (+0.8 percent over the past six months). Three of seven LAG components made positive contributions. The Conference Board anticipates the U.S. economy will expand 1.9 percent in both 2026 and 2027.

Manufacturing production edged up in July. The Federal Reserve estimates that manufacturing production grew 0.2 percent on a seasonally adjusted basis, just below June’s 0.3 percent advance. Durable goods production surged 0.7 percent (despite a 2.1 percent drop in automobiles), while nondurables production declined 0.4 percent. Overall industrial production grew 0.2 percent, with gains in both mining (+0.2 percent) and utilities (+0.5 percent). Manufacturing and industrial production have risen 1.2 percent and 1.1 percent, respectively, over the past year. Manufacturing capacity utilization increased by 1/10^th of a percentage point to 76.0 percent.

Housing starts slumped in June. The Census Bureau reports that starts of privately owned homes fell 12.4 percent to a seasonally adjusted annualized rate (SAAR) of 1.239 million units. Starts were down 13.5 percent from a year earlier. Starts were down month-over-month for both single-family (-9.9 percent) and multi-family (-15.6 percent) units, with year-over-year declines of -15.7 percent and -7.2 percent, respectively. Looking ahead, the annualized count of issued building permits increased 5.0 percent to 1.443 million (+3.1 percent versus July 2025). Completions plummeted 9.1 percent to an annualized 1.212 million units. Completions are off 16.8 percent from a year earlier. 

Homebuilders lacked enthusiasm in August. The Housing Market Index (HMI) from the National Association of Home Builders added one point to a seasonally adjusted 35. An HMI reading below 50 indicates that fewer homebuilders are confident about current and near-term housing market conditions. The HMI was at 32 one year ago. The HMI rose one point in three of four Census regions: Northeast (42), South (32), and West (27), and held steady in the Midwest (45). The current sales index added two points to 39, while those for expected sales over the next six months (43) and traffic of prospective buyers (23) were unchanged. Thirty-five percent of homebuilders cut prices during the month.

Contract signings for home purchases declined in July. The Pending Home Sales Index (PHSI) from the National Association of Realtors fell 2.3 percent to a seasonally adjusted 71.2. The PHSI, which measures housing contract activity, was down 2.2 percent from a year earlier. In July, the PHSI declined in all four Census regions, with decreases ranging from -4.7 percent in the West to -0.7 percent in the Midwest. The same pattern held for year-over-year comparisons in three regions: West (-7.1 percent), South (-3.0 percent), and Northeast (-0.2 percent). The PHSI was up 1.7 percent from a year earlier. The press release blames the “highest mortgage rates of the year” for the drop in contract signings. 

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

• Jobless Claims (Week ending August 15, 2026, First-Time Claims, seasonally adjusted): 206,000 (-6,000 vs. the previous week, -27,000 vs. the same week a year earlier). 4-week moving average: 204,000 (-10.3% vs. the same week a year earlier).
• Import Prices (July 2026, All Imports, not seasonally adjusted): -0.4% vs. June 2026; +5.9% vs. July 2025. Nonfuel Imports: +0.4% vs. June 2026; +4.5% vs. July 2025.
• Export Prices (July 2026, All Exports, not seasonally adjusted): -1.3% vs. June 2026; +8.2% vs. July 2025. Non-agricultural Exports: -1.5% vs. June 2026; +8.5% vs. July 2025.
• Treasury International Capital (June 2026, Net Foreign Purchases of U.S. Securities, not seasonally adjusted): +$207.1 billion (May 2026: +$262.8 billion; June 2025: +$199.2 billion.
• FOMC Minutes

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