The U.S. Economy Shows Signs of Slowing in August Readings

Sources: Commerce Department, Department of Labor, Federal Reserve, National Association of Home Builders, major automaker reports

​The U.S. economy has begun to show signs of slight stagnation in August; however, most readings continue to remain strong. The employment figures, released by the Bureau of Labor Statistics, showed that the labor market found room to expand, despite being historically tight. The U.S. added 201,000 jobs in August, up 28.0% from July, and maintained the unemployment rate at 3.9%. Furthermore, wages grew at 2.9%, their fastest annualized rate since before the Great Recession

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Despite this, consumer expenditures on big-ticket items have begun to plateau. Housing starts were up 0.8% for July, from a revised 1.158 million in June to 1.168 million. After declining in July, auto sales were up slightly again in August, with a majority of the sales continuing to go to SUVs and larger vehicles.

Retail sales fell in July for the second straight month, figures released in August show. Unadjusted retail sales were a reported $507.6 billion in July, down slightly from $510.9 billion in June. However, as announced in mid-August, the Consumer Price Index stayed flat in July at 2.9%, up one-tenth of a percentage point from May’s reading of 2.8%.

Major stock indices also rose in August, with the Nasdaq closing up 5.7% and the S&P 500 up 3.0%. 

The highlights from our weekly economic updates during August 2018 included:

• Week 1: July auto sales declined in the U.S., the FOMC left the Fed Funds rate unchanged, and July’s Employment Summary showed labor market strength
• Week 2: July CPI and PPI rise slightly, and businesses struggle to fill job vacancies
• Week 3: Retails sales grow in July, oil prices fall on storage announcement, housing starts rebound, Philadelphia Fed releases its economic outlook, and Consumer Sentiment Index falls in August
• Week 4: Yield curve flattens, New York Fed GDP forecast falls, Jobless claims fall, and Creighton releases mid-American economic reports