Week of Aug 17, 2025 Weekly Recap & The Week Ahead
“Do more of what works and less of what doesn’t”. – Steve Clark
1. US Core CPI Picks Up on Services; Goods Inflation More Subdued — Consumer prices were up 2.7% in July from a year earlier, the Labor Department reported, unchanged from June’s gain of 2.7%. Prices excluding food and energy categories—the so-called core measure economists watch in an effort to better capture inflation’s underlying trend—rose 3.1% over the past 12 months, above forecasts for a 3% increase. Energy prices declined 1.1% compared with June, with gasoline down 2.2%. Oil prices have slipped this year, driven down by expectations of a slowing global economy. Groceries fell 0.1%. Rent returned to a more normal 0.3% increase after a period of big jumps, said Bank of America senior U.S. economist Stephen Juneau.
2. US Producer Prices Rise by Most in Three Years on Services — The producer price index increased 0.9% from a month earlier, the largest advance since consumer inflation peaked in June 2022, according to a Bureau of Labor Statistics report out Thursday. The PPI rose 3.3% from a year ago. Services costs increased 1.1% last month — the most since March 2022. Within services, margins at wholesalers and retailers jumped 2%, led by machinery and equipment wholesaling. Goods prices excluding food and energy rose 0.4%.
3. Consumer Sentiment Signals Caution After Solid US Retail Sales — The value of retail purchases, not adjusted for inflation, increased 0.5% after an upwardly revised 0.9% gain in June, Commerce Department data showed Friday. Excluding cars, sales climbed 0.3%. Friday’s report implies a much better start to consumer spending in the second half of the year after uncertainty around President Donald Trump’s policies — chief among them tariffs — took a toll on sentiment and kept many consumers on the sidelines in the preceding months. While the labor market is shifting into a lower gear, additional clarity on trade policy and a rebound in the stock market is giving some consumers more confidence about their spending power. Nine out of 13 categories posted increases, led by the biggest gain in motor vehicle sales since March. Sales at online retailers and general merchandise stores advanced, likely boosted by campaigns including Amazon.com Inc.’s extended Prime Day, Walmart Inc.’s weeklong “Deals” event and a similar promotion at Target Corp.
4. China’s Economy Shows Signs of Slowing, Raising Pressure on Beijing — Annual growth in retail sales and industrial production both slowed in July when compared with June, according to figures published Friday, an early sign that the second six months of the year are set to prove tougher for China’s economy than a solid first half. The economy expanded an annual 5.3% in the January to June period, China’s National Bureau of Statistics reported last month, but keeping that momentum going through the second half will be harder as U.S. tariffs bite into global trade, economists say. Support for Chinese exports from heavy frontloading by U.S. importers racing to get ahead of tariff deadlines is likely to fade now that many of Trump’s levies have taken effect.
The U.S. and China agreed to extend their trade truce for another 90 days earlier this week, but U.S. tariffs on Chinese imports are still painfully high and hitting direct trade between the two economies. An August report by Global Trade Alert, a Switzerland-based outfit that tracks trade policy, said U.S. imports from China face a tariff on average of around 43.5%, after accounting for wrinkles such as different rates applied to different products and exemptions for certain items.
The week ahead — Economic data from Econoday.com:
