Monthly Economic Headlines

Jackson Hole meeting reinforces focus on inflation. 

Federal Reserve Chair Kevin Warsh used his Jackson Hole address to emphasize that inflation remains above the Fed's target despite a resilient economy and labor market. While no policy changes were announced, the speech reinforced the Fed's willingness to maintain a restrictive policy stance until inflation shows clearer progress toward 2%.  

Economic growth remains resilient. 

The ISM Services Purchasing Manager Index rose to 55.4, with business activity and new orders reaching some of their strongest levels in several years despite elevated borrowing costs (readings above 50 signal growth). Businesses also reported higher costs for fuel, freight, steel, software licensing, and tariff-related expenses, highlighting the economy's ability to absorb inflationary pressures. 

Labor data sends mixed signals. 

The U.S. economy added 162,000 jobs in August, underscoring the labor market's resilience. However, the ISM Services Employment Index remained in contraction territory and consumers expressed growing concern about future unemployment prospects. Average hourly earnings growth is lagging inflation at 3.1% year over year, suggesting ongoing pressure on household purchasing power. 

AI investment reshapes capital markets. 

While artificial intelligence is expected to boost productivity over time, its near-term economic impact has primarily come through a surge in infrastructure investment. Federal Reserve research suggests that spending on data centers, power infrastructure, and computing capacity is increasing demand for capital, potentially contributing to higher long-term interest rates alongside persistent federal borrowing.  

Go to Industry Insights homepage