Going Back Up: What We Learned During the Week of September 14 – 18

There was no dissent among the FOMC on raising the fed funds target rate. Here are five things we learned from U.S. economic data released during the week ending September 18. 

The Federal Reserve raised its short-term interest rate target by a quarter point. The statement released after this past week’s Federal Open Market Committee (FOMC) meeting notes that “inflation remains inflated” even as the economy was “expanding at a solid pace.” It also stated that spending was “resilient,” productivity growth was “strong,” and capital investment was “robust.” Because the FOMC “will deliver price stability,” the committee voted unanimously to raise the fed funds target rate by 25 basis points to 3.75 to 4.00 percent. The committee also released economic forecasts from most FOMC participants. The median forecast includes another 25-basis-point rate hike before the end of the year, with the fed funds target rate expected to hold steady in 2027. 

Retail sales heated up in August. Retail and food services sales rose 1.2 percent to a seasonally adjusted $773.9 billion. The Census Bureau reports that June through August sales were 6.0 percent above the comparable 2025 months. A surge in gas prices led to a 3.1 percent jump in gas station sales. Netting out the combination of that with the 0.6 percent increase at motor vehicle/parts dealers leaves core retail sales up 1.2 percent during the month, with sales over the past three months 1.4 percent ahead of the comparable 2025 pace. Sales increased at retailers focused on electronics/appliances (+1.6 percent), sporting goods/hobbies (+1.2 percent), furniture (+0.9 percent), health/personal care (+0.9 percent), apparel (+0.7 percent), and groceries (+0.5 percent). Restaurant/bar sales jumped 1.2 percent, while those at building material stores declined 0.2 percent.

Manufacturing production declined in August. The Federal Reserve reports that manufacturing output fell 0.3 percent on a seasonally adjusted basis after advancing 0.2 percent in July. Durable goods production slumped 0.5 percent, while nondurables output was unchanged. Overall industrial production held steady in August after rising 0.2 percent over the prior two months. Mining output grew 0.1 percent, while utilities output surged 1.8 percent. Over the past year, manufacturing output has increased 0.9 percent, while overall industrial production has grown 1.4 percent. Manufacturing sector capacity utilization fell 0.3 percentage points to 75.7 percent, 2.5 percentage points below its historical average. 

Forward-looking economic measures point to a slowdown in August. The Conference Board’s Leading Economic Index (LEI) declined 0.1 percent to 99.5 (2016=100). The index was 0.1 percent below its reading six months ago. Five of ten LEI measures contributed positively to the index, led by the stock market and the interest rate spread. The Coincident Economic Index (CEI) edged up 0.1 percent to 114.9. The CEI has improved by 0.4 percent over the past half year. All four CEI components made positive contributions to the index. The Lagging Economic Index (LAG) expanded 0.2 percent to 120.6, up 0.9 percent over the past six months. Four of seven index components contributed positively, led by commercial & industrial loans outstanding and the change in consumer prices for services. The Conference Board expects GDP to grow 1.9 percent this year and 1.8 percent next year.

Housing starts slowed in August. Privately owned housing starts declined 2.6 percent to a seasonally adjusted annualized rate of 1.275 million units. The Census Bureau measure was 1.2 percent below its year-ago pace. Starts fell for both single-family (-1.8 percent) and multi-family (-3.1 percent) units. Looking ahead, building permits issued dropped 2.7 percent to an annualized 1.394 million (+3.5 percent versus August 2025). Permits were down for single-family (-1.8 percent) and multi-family (-3.1 percent) homes. Home completions plummeted 11.9 percent to an annualized 1.280 million units (-27.1 percent versus August 2025).

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

• Jobless Claims (Week ending September 12, 2026, First-Time Claims, seasonally adjusted): 196,000 (-10,000 vs. the previous week, -37,000 vs. the same week a year earlier). 4-week moving average: 203,250 (-15.0% vs. the same week a year earlier).
• Import Prices (August 2026, All Imports, not seasonally adjusted): +0.7% vs. July 2026; +7.0% vs. August 2025. Nonfuel Imports: +0.8% vs. July 2026; +5.5% vs. August 2025.
• Export Prices (August 2026, All Exports, not seasonally adjusted): +0.6% vs. July 2026; +8.6% vs. August 2025. +0.7% vs. July 2026; +8.9% vs. August 2025.
• Pending Home Sales (August 2026, Index (2001=100), seasonally adjusted): 71.2 (+0.3% vs. July 2026; -4.7% vs. August 2025).
• Housing Market Index (September 2026, >50 = Majority of Homebuilders Feel Confident About the Housing Market, seasonally adjusted): 32 (August 2026: 35; September 2025: 32).
• State Employment (August 2026, Nonfarm Payrolls, seasonally adjusted): Increased in 4 states and unchanged in 46 states and the District of Columbia vs. July 2026. Increased in 8 states, decreased in the District of Columbia, and unchanged in 42 states vs. August 2025.
• Business Inventories (July 2026, Manufacturers’ and Trade Inventories, seasonally adjusted): $2.765 trillion (+0.8% vs. June 2026; +3.8% vs. July 2025).
• Treasury International Capital Flows (July 2026, Net Foreign Purchases of U.S. Securities, not seasonally adjusted): +$40.6 billion (June 2026: +$171.3 billion; July 2025: +$69.6 billion).

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