Weekly Market Commentary August 24, 2026
Week in Review
The week's economic data suggested the economy continues to grow at a moderate pace, while labor market conditions remained resilient and Federal Reserve policymakers maintained a cautious stance on inflation. Market attention centered on the release of the July Federal Open Market Committee (FOMC) meeting minutes, crude oil inventories, jobless claims, and business activity surveys.
On Wednesday, the Federal Open Market Committee released the minutes from its July meeting, where policymakers left rates unchanged at 3.50%–3.75%. The minutes showed officials generally viewed inflation as moving in the right direction but remained cautious about easing policy prematurely. The discussion reinforced the Fed's data-dependent approach ahead of the September meeting.
Also on Wednesday, the U.S. Energy Information Administration released its weekly crude oil inventory report. Crude oil inventories increased by 4.4 million barrels, significantly above expectations for a 0.2-million-barrel increase. The larger than expected build suggested near-term oil supplies were more ample than anticipated, helping ease some concerns about energy-driven inflation despite crude oil prices remaining elevated.
On Thursday, initial jobless claims fell to 206,000 from the prior week's revised 212,000 reading. The decline suggested layoffs remain limited despite evidence of moderating economic growth. Continuing claims rose to 1.799 million, indicating hiring conditions may be becoming more selective, though overall labor market conditions remain stable.
The week concluded with the release of the August Flash Purchasing Managers' Indexes (PMI). The Services PMI increased to 56.8 from 54.6, marking its highest reading since December 2024, while the Manufacturing PMI slipped to 53.2 from 53.9, a five-month low. The strength in the services sector more than offset slower manufacturing activity, lifting the Composite PMI to 56.0 from 54.5, its highest level since April 2022. The report suggested economic activity accelerated during August despite the headwinds from elevated interest rates and restrictive financial conditions.
Overall, the week's data reinforced the view that the economy is gradually cooling but remains on solid footing. Inflation pressures continue to moderate, labor market conditions remain healthy, and business activity continues to expand, supporting expectations that the Federal Reserve will closely monitor incoming data before making any further policy adjustments.
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