Weekly Market Commentary August 10, 2026
Week in Review
The week of August 3 was highlighted by a mixed set of economic releases that reinforced two key themes: business activity remained in expansion territory, while labor market indicators softened.
Economic growth data remained constructive throughout July. Manufacturing Purchasing Managers’ Index (PMI) held at 53.9, while ISM Manufacturing PMI rose to 55.6 from 53.3 in June and exceeded expectations. Services activity also remained healthy, with the Services PMI increasing to 54.6 and the ISM Non-Manufacturing PMI registering 54.1. Collectively, these readings indicate continued expansion across both manufacturing and service sectors and suggest economic activity remained resilient despite a slowing labor backdrop.
Inflation pressures also remained elevated. The ISM Manufacturing Prices Index registered 71.1, while the ISM Non-Manufacturing Prices Index increased to 70.3 from 67.7. These readings indicate businesses continue to report meaningful input cost pressures, particularly within the services sector, suggesting inflation remains an area of focus for policymakers.
Labor market data represented the week's primary source of weakness. Job openings declined to 7.36 million, ADP employment growth totaled 44,000, and July Nonfarm Payrolls unexpectedly fell by 23,000 versus expectations for an 85,000 increase. Average hourly earnings increased by just 0.1% month-over-month, while the unemployment rate improved modestly to 4.1%. Initial jobless claims were little changed at 199,000. Taken together, the data points to a gradually cooling labor market, even as broader economic activity remains constructive.
Overall, the week's releases suggest the economy continues to expand, though employment trends and inflation pressures remain key areas for investors and policymakers to monitor.
Week Ahead
The upcoming week will provide investors with important updates on inflation, consumer activity, and housing conditions, all of which could influence expectations for future Federal Reserve policy decisions. Inflation data will be the primary focus, as both Consumer Price Index (CPI) and Producer Price Index (PPI) reports are scheduled for release.
Consensus expectations call for headline CPI to increase 0.1% month-over-month in July, while annual inflation is projected to ease slightly to 3.4% from 3.5%. Core CPI is expected to rise 0.2%, and PPI is also forecast to increase 0.2%, providing additional insight into underlying pricing pressures across the economy.
Beyond inflation, investors will be monitoring several indicators tied to consumer and housing market health. Retail sales are expected to increase 0.1% in July, while core retail sales are projected to rise 0.2%, helping gauge whether consumer spending remains resilient following the weaker-than-expected July employment report. Existing home sales are expected to register 4.05 million units, offering another perspective on housing market activity amid elevated borrowing costs.
Additional releases include weekly initial jobless claims, crude oil inventory data, and Treasury auctions for both 10-Year Notes and 30-Year Bonds. Overall, this week's reports should help determine whether inflation continues to moderate, consumer demand remains supportive of growth, and economic activity retains its recent momentum.
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