1. Private payrolls rose by 38,000 in August, less than expected, ADP reports — The payrolls processing firm said firms added 38,000 workers, fewer than the upwardly revised 46,000 in July and below the Dow Jones consensus estimate for 47,000. Though job creation held positive, August was the smallest gain since January and reflective of a broader slowdown in the labor market. Moreover, most of the jobs came from three sectors, with multiple others showing declines. Leisure and hospitality added 16,000 positions and construction was up 12,000. Outside of that, though, there were few growth areas. Manufacturing lost 17,000 jobs, professional and business services was off 16,000, and both natural resources and mining as well as trade, transportation and utilities reported declines of 5,000.
2. US Trade Gap Widens on Import Surge — The gap in goods and services trade grew 24.4% from the prior month to $88.6 billion, according to the Trump administration. The rapid rate of technology imports reflects the investment race in artificial intelligence, a key driver of current US economic growth. While many of Donald Trump’s tariffs, levied as part of his ongoing trade war, were struck down as unconstitutional earlier this year, the president is using other authorities to impose duties (moves which also have triggered litigation). Most recently, the US levied 50% duties on billions of dollars of Canadian goods, and Canada retaliated after trade talks fell apart last month. Meanwhile, the value of outbound US shipments of industrial supplies such as oil and petroleum products declined, according to the Commerce Department. Exports of non-monetary gold also fell. Trade in this category has been particularly volatile since early last year.
3. US Adds 162,000 Jobs, Topping All Estimates in Broad Advance — Nonfarm payrolls increased 162,000 last month and July’s job losses were revised away, according to Bureau of Labor Statistics data out Friday. The August increase topped all estimates in a Bloomberg survey. The unemployment rate remained at 4.1%. The broad advance in payrolls was led by a rebound in leisure and hospitality employment following big declines in June and July. Local government education also added about 42,000 jobs following outsize cuts last month. That category can be volatile in the summer as many teachers fall off of payrolls before returning again as the school year begins. Manufacturing payrolls rose by the most since 2023, while construction firms added the most jobs since January. Many economists have pointed to the data-center buildout as a driver of demand for construction labor this year.
The financial activities and information sectors — both of which are seen as particularly exposed to AI-related job displacement — shed a combined 34,000 positions.
4. U.S. Trade Deficit Widened in July — U.S. imports were higher than exports by $88.6 billion, versus $71.2 billion in June. Analysts polled by The Wall Street Journal were expecting a $90 billion deficit. The gap is the result of imports increasing 2.8% in July from the previous month, to $399.3 billion, while exports decreased 2.1% to $310.7 billion.
Imports of goods increased $11.4 billion in July, while exports of goods decreased $6.2 billion. Exports of crude oil decreased $4.5 billion. International commerce has been affected by volatile tariffs that put the U.S. at odds with traditional trade partners. More recently, negotiations with Canada have failed to yield a deal, opening the door for steep levies from both sides. Wars in the Middle East, Russia and Ukraine are also disrupting energy and food trade.
strong>The week ahead — Economic data from Econoday.com:
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September 3rd, 2026
“Buy the Dip & Sell the Rip” — trader
1. Carney Matches Trump Tariffs With 50% Tax on US Furniture, Steel — Canada will double its existing counter-tariffs on US steel and aluminum products to 50%. American-made furniture, clothing and apparel will also have new 50% tariffs applied, as will video-game consoles, smartphones and other electronics.
Overall, the retaliatory levies will affect about $20 billion worth of annual US imports, roughly matching the dollar value of the tariffs Trump put on Canadian products on Saturday under a never-before-used provision of the 1930 Tariff Act. That’s equal to about 6% of Canada’s goods imports from the US last year. Other US goods such as appliances, cheese, fish, seafood, and certain steel and aluminum derivative products will have new 25% tariffs applied. A range of US-made machinery, industrial tools and farm equipment will have 15% tariffs applied. The new duties are set to take effect Sept. 8.
2. US New-Home Sales Decline to Lowest Level Since January — Contract signings on new single-family homes decreased 10.5% last month to a 607,000 annual rate, according to government figures released Tuesday. Economists surveyed by Bloomberg expected a 620,000 annualized sales pace, based on the median estimate. Sales have fallen in three of the last four months, adding to evidence of a housing market burdened by elevated finance costs and prices. While builders have had some success bolstering demand with free upgrades, mortgage rate buydowns and price reductions, the entry-level market remains affordability-constrained.
3. Fed’s preferred inflation gauge shows core prices rose 3.3% annually in July — The personal consumption expenditures price index, which the Fed uses as its preferred forecasting tool, increased a seasonally adjusted 0.2% for the month, putting the annual inflation rate at 3.7%, the Commerce Department reported Wednesday. Both were 0.1 percentage point above the Dow Jones consensus. But stripping out volatile food and energy costs, core PCE posted respective gains of 0.2% and 3.3%, in line with forecasts. While the Fed considers both measures, policymakers generally see core inflation as the better measure of longer-term trends. The report comes with Fed officials weighing their next policy move as inflation, despite generally soft monthly readings this summer, is still well above the central bank’s 2% goal.
4. Warsh Says Fed May Not Be Done Fighting Inflation — In a sweeping speech, his first since becoming chairman of the central bank in May, Warsh reiterated that policymakers will return inflation to their 2% goal, which he said is a firm and fixed target. Warsh added that financial conditions are not currently restrictive and interest rates are the Fed’s “predominant tool” for achieving its mandate, though he stopped short of signaling he would support an interest-rate hike when Fed officials gather in September. Yields for two-year Treasuries rose by as much as nine basis points to 4.32%, while 30-year yields slipped two basis points to 5.17% — moves that signal an expectation that the Fed may need to raise short-term rates. The implied probability of a rate hike in September rose to above 50%, up from around 36% before the speech, based on federal funds futures.
strong>The week ahead — Economic data from Econoday.com:
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August 26th, 2026
In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497 — Warren Buffett
1. Trump Takes Iran Hard Line as Hormuz Tensions Mark New Normal — The memorandum of understanding that the US and Iran signed in June in an effort to buy time to negotiate a lasting peace deal — as repeatedly violated as it had been during that 60-day window — has expired. There are no plans to extend it. The United Arab Emirates on Tuesday said it was cutting off trade, commercial exchanges and financial transactions with Iran until further notice “in light of regional escalations that undermine regional and international peace and security.”
2. U.S. Imposes 50% Tariffs on Some Canadian Goods After Last-Ditch Talks Fail — Trade talks between the U.S. and Canada broke down on Friday, officials from both countries said, paving the way for the U.S. to impose 50% tariffs on about $20 billion worth of Canadian goods early on Saturday and risking escalation into an all-out trade war. The Trump administration first threatened the latest round of tariffs last month, saying they would be imposed in response to Canada’s provincial bans on American alcohol, protections for its domestic dairy industry and quotas and tariffs on some U.S. vehicles. Many of Canada’s recent trade actions against the U.S. were put in place in retaliation for earlier levies imposed by Trump, including his sector-specific levies of up to 50% on automobiles, steel, aluminum and forest products. Though most Canadian exports have avoided those duties because they complied with the U.S.-Mexico-Canada Agreement, the new round of tariffs doesn’t exempt such products.
3. Fed Minutes Reveal Broader Support for Rate Increases — The decision to hold the benchmark rate steady between 3.5% and 3.75% drew three dissents from Fed presidents who thought a rate increase was warranted. While there are 12 voting members of the Federal Open Market Committee, a total of 19 officials, including seven bank presidents without a vote, participate in the meetings. The minutes suggested that some officials without a vote would have also supported raising rates. At a press conference after the July 28-29 meeting, Chairman Kevin Warsh deflected criticism that holding rates meant the Fed was doing nothing. He pointed to the rise in market interest rates since the June meeting, in both nominal and inflation-adjusted terms, as evidence that financial conditions had tightened without the Fed acting.
strong>The week ahead — Economic data from Econoday.com:
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August 20th, 2026
“I’m only rich because I know when I’m wrong… I basically have survived by recognizing my mistakes.” — George Soros
1. July Home Sales Fell After Higher Mortgage Rates Scared Off Buyers — Sales of existing homes declined 1.7% in July over the previous month to a seasonally adjusted annual rate of 4.06 million, the National Association of Realtors said. Mortgage rates briefly fell below 6% in February, but jumped with the beginning of the Iran war, and have continued to creep up as hopes for a clean end to the conflict have faded.
The 30-year fixed-rate mortgage averaged 6.69% last week, the fifth consecutive week of increases, after averaging 6.43% at the start of July, according to Freddie Mac.
Many homeowners benefiting from low rates from years ago have opted to stay put to maintain their rates, which has dragged down available inventory. NAR said unsold inventory in July fell 1.9% from June to 1.54 million units.
2. Inflation Was 3.4% in July, Down Slightly From the Previous Month — Stop-and-start peace negotiations in the Middle East brought a respite for gasoline prices. And so-called core prices, which exclude the volatile food and energy categories, rose by 0.2% in July from the previous month, a relatively modest increase offering hope that broader price pressures could be abating. Core prices rose by 2.5% over the past 12 months, down from 2.6% in the year through June. The relatively modest increase in underlying inflation may relieve some immediate pressure on the Fed to raise interest rates in September.
3. US Wholesale Inflation Cools — The producer price index rose 4.7% from July 2025 after a 5.5% annual increase in June, according to Bureau of Labor Statistics data out Thursday. On a month-over-month basis, the PPI was unchanged. Excluding food and energy, producer prices climbed 4.2% from a year ago and 0.2% compared with June.The PPI report follows consumer price data showing moderating inflation, adding to evidence that the initial war-driven energy shock is continuing to fade. It will also give Fed officials more room to weigh lingering inflation pressures against a recent slowdown in hiring.
4. Weak Retail-Sales Number Adds to Softening Economic Data — The value of retail purchases, which isn’t adjusted for inflation, decreased 0.6%, the most since May 2025, according to data published Friday by the Census Bureau. Excluding autos and gasoline, sales fell 0.2%. The report suggests consumers took a breather last month after a stronger first half of 2026, though some analysts also warned the numbers could be affected by spending pulled forward after Amazon.com Inc. moved its Prime Day sales event to June this year from July the year before. Five of 13 categories in the report posted declines, led by a 2.2% drop in sales at nonstore retailers such as Amazon. Sales at motor vehicles and parts dealers fell 1.8%. Meanwhile receipts at restaurants and bars, the only service-sector category in the retail report, rose 0.5%.
strong>The week ahead — Economic data from Econoday.com:
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