Read the highlights of this week’s commentary from Helios:
- The July Consumer Price Index (CPI) held steady at 2.7% year-over-year, while core CPI, which excludes more volatile food and energy prices, rose to 3.1%, a 5-month high. Producer prices surged 0.9% in July, the biggest gain since March 2022, signaling tariff-driven cost pressures moving through supply chains. Meanwhile, early August consumer sentiment fell, with one-year inflation expectations climbing to 4.9% from 4.5%.
- Retail sales rose 0.5% in July, with June figures revised upward to 0.9%, demonstrating continued consumer spending strength. A key measure that feeds into GDP also increased by 0.5%, showing resilience in consumer activity. However, spending at restaurants and bars declined, suggesting people may be cutting back on some discretionary purchases.
- The divergent data underscores a mixed economic outlook for Federal Reserve policy decisions. Stable headline CPI supports potential rate cuts, but the significant PPI increase and deteriorating consumer confidence regarding inflation expectations may influence the Fed’s September meeting deliberations.
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