Last week was a wild ride for the economy. Friday’s jobs report was a gut punch—only 73,000 jobs added in July, way below the 100,000 expected, with May and June numbers revised lower too. Earlier, Q2 GDP surprised at 3.0%, beating the 2.5% forecast, and consumer confidence edged up to 97.2, better than expected. Core PCE inflation stayed at 2.8% year-over-year, but manufacturing PMI slumped to 48.0, showing weakness. Treasury yields climbed, with the 7-year note at 4.092%, and a shocking 7.698 million barrel jump in crude oil inventories added to the chaos. It was a week of ups and downs, with uncertainty taking center stage.

Inflation & Prices
Inflation indicators last week held steady, with Core and monthly PCE aligning with expectations.

• Core PCE (YoY) held steady at 2.8%, matching forecasts and slightly up from the prior 0.2%.

• The overall PCE Price Index rose 0.3% MoM, bumping the annual rate to 2.6%, slightly above expectations.

• The GDP Price Index came in lighter than expected at 2.0% (vs 2.2% forecast), cooling from 3.8% last quarter.

• ISM Manufacturing Prices dropped to 64.8, missing forecasts of 69.9, indicating easing pressure in input costs.

• Michigan 1-year and 5-year inflation expectations both declined to 4.5% and 3.4%, respectively — a welcome dip.

Jobs & Wages
Employment data showed clear signs of softening, even as wages continued to edge up.

• Nonfarm Payrolls came in at just 73K, far below the expected 106K, though up from last month’s weak 14K.

• Private payrolls were 83K (vs 100K forecast), and the unemployment rate ticked up to 4.2%.

• The U6 rate rose to 7.9%, and the participation rate dipped slightly to 62.2%.

• Average hourly earnings rose 0.3% MoM and 3.9% YoY, both slightly higher than expected.

• ADP reported a stronger-than-expected 104K gain, but that wasn’t enough to offset the weak BLS print.

Growth & Spending
Economic growth bounced back strongly, and consumer spending showed modest gains.

• Q2 GDP jumped 3.0%, beating the 2.5% forecast and swinging from a -0.5% decline in Q1.

• Personal spending increased 0.3%, a bit softer than the 0.4% forecast, but still positive.

• The Employment Cost Index rose 0.9%, matching last quarter but slightly above consensus.

• The Atlanta Fed GDPNow for Q2 was revised up to 2.9%, but the Q3 estimate slipped from 2.3% to 2.1% by Friday.

Consumer & Housing
Consumer sentiment is stabilizing, but housing remains under pressure.

• Consumer Confidence rose to 97.2 (above 95.9 forecast), and Michigan Sentiment ticked up to 61.7.

• However, Pending Home Sales dropped -0.8%, reversing last month’s +1.8% gain.

• The Case-Shiller Home Price Index showed slower growth — +0.4% MoM vs +0.8% previously, and +2.8% YoY, continuing a cooling trend.

Manufacturing & Business Activity
Manufacturing cooled further, falling back below the 50-line into contraction.

• ISM Manufacturing PMI dropped to 48.0 (vs 49.5 forecast), while employment within the sector slumped to 43.4.

• Chicago PMI improved to 47.1, but remains below 50, and Construction Spending fell -0.4% for a second month.

• Goods Trade Balance came in at -85.99B, better than forecast but still historically wide.

Energy & Fed
Oil inventories surged while the Fed held steady.

• Crude oil inventories unexpectedly rose by +7.7M barrels, well above the -2.3M forecast.

• The Fed kept rates unchanged at 4.50%.

• Treasury auctions saw yields increase: 2Y at 3.92%, 5Y at 3.98%, and 7Y at 4.09%, reflecting the market’s shift toward higher-for-longer expectations.