“Every battle is won or lost before it’s ever fought” – Sun Tzu

1. U.S. Inflation Remained High in August — the Labor Department on Tuesday reported its consumer-price index rose 8.3% in August from the same month a year ago, down from 8.5% in July and from 9.1% in June, which was the highest inflation rate in four decades. The CPI measures what consumers pay for goods and services. So-called core CPI, which excludes often volatile energy and food prices, increased 6.3% in August from a year earlier, up markedly from the 5.9% rate in both June and July—a signal that broad price pressures strengthened.
On a monthly basis, the core CPI rose 0.6% in August—double July’s pace. Investors and policy makers follow core inflation closely as a reflection of broad, underlying inflation and as a predictor of future inflation.
2. Mortgage Rates Hit 6.02%, Highest Since the Financial Crisis — per WSJ, the average rate on a 30-year fixed mortgage climbed to 6.02% this week, up from 5.89% last week and 2.86% a year ago, according to a survey of lenders released late last week by mortgage giant Freddie Mac. The last time rates were this high was in the heart of the financial crisis in 2008, when the U.S. was deep in recession. The jump in mortgage rates is one of the most pronounced effects of the Federal Reserve’s campaign to curb inflation by lifting the cost of borrowing for consumers and businesses. Already, it has ushered in a sea change in the housing market by adding hundreds of dollars or more to the monthly cost of a potential buyer’s mortgage payment, slowing what was a red-hot market not so long ago. Higher rates are forcing some would-be buyers to continue renting. Other buyers are skimping elsewhere to make their mortgage payments.
3. U.S. Retail Sales Rose 0.3% in August, Showing Resilience in Face of Inflation — according to WSJ, U.S. consumers spent at a steady pace in August as gasoline prices fell, with purchases of vehicles and back-to-school items like clothing driving the gain. Retail sales, a measure of spending at stores, online and in restaurants, rose 0.3% in August from the prior month, the Commerce Department said Thursday. July spending was revised down to a 0.4% decline from a previous flat reading.
Much of August’s gain was due to higher spending on vehicles, with purchases at motor vehicle and parts dealers up 2.8% on the month. A measure of spending that strips out vehicle sales declined 0.3% from July. Stripping out both vehicle and gasoline spending, retail sales rose 0.3%.
4. FedEx Stock Tumbles After Warning on Economic Trends — The delivery giant’s shares lost 21% Friday—its biggest one-day percentage drop ever—after the company said a macroeconomic slowdown had led to lower volumes of goods moving around the world in recent weeks. FedEx and rival United Parcel Service Inc. have confronted lower volumes of packages this year as a pandemic boom in online shopping cools. Consumers have switched more of their spending to travel and entertainment, plus high inflation has reduced the number of items being purchased. Big retailers that are FedEx customers like Walmart Inc. have also pulled back on orders after they have been stuck with a glut of unsold goods.

The week ahead — Economic data from Econoday.com: