Week of August 24–28, 2026

In summary

• Core PCE rose +0.25% M/M in July, essentially in line with expectations, and was unchanged on a Y/Y basis at +3.34%; Goods PCE helped hold down the headline figure, falling -0.61% M/M — the biggest decline since May 2025 — as Energy Goods dropped another -3.0% M/M following June’s -9.6% decline, slowing broader Goods PCE to +1.26% Y/Y.
• Consumer Spending slowed to +0.16% M/M, the smallest increase since January 2026 though slightly above forecasts of +0.1%, partly reflecting lower energy prices, leaving the Y/Y figure at +5.92%; Incomes rose +0.43% M/M against forecasts of +0.2%, but the Y/Y pace slowed to +3.69% and remains in its multi-year downtrend, with Medicare and Medicaid increases contributing while unemployment benefits fell.
• The second estimate of Q2 2026 U.S. GDP came in at +1.48% Q/Q annualized, little changed from the initial +1.50% reading, with Consumer Spending revised up 0.3 points to +3.4% Q/Q and Imports up 1.0 point to +12.5%, while Private Domestic Investment was revised down 0.3 points to +2.7% and Exports and Final Sales were essentially unchanged.
• Final Sales to Private Domestic Purchasers posted a +4.17% Q/Q gain, the largest since Q1 2023 and indicative of solid underlying demand, while Corporate Profits After Tax jumped +8.22% Q/Q, the biggest quarterly increase since Q2 2021.
• Durable Goods Orders rose +1.07% M/M in July, well above forecasts of +0.5%, with June revised up to +0.5% from +0.3% and the Y/Y pace accelerating to +11.95%; Core Capital Goods orders — non-defense ex-aircraft, a business spending proxy — gained a more muted +0.20% M/M against expectations of +0.9%, though June was revised up to +1.7% from +0.9% and the series remains +12.86% higher Y/Y.
• The Goods Trade Deficit unexpectedly widened to -$118.8 billion in July as Imports rose +3.70% M/M to $318.2 billion, the most since March 2025 and +13.7% Y/Y, while Exports fell -2.94% for a third consecutive monthly decline — the longest streak since mid-2023 — to $199.4 billion; Capital Goods ex-Autos drove the import gain at +11.3% M/M, the most since June 1993, while Industrial Supplies led exports lower at -11.2% M/M.
• Final August Michigan Consumer Sentiment was revised up to 51.7 from the preliminary 51.0, with Consumer Expectations at 51.5 and Current Economic Conditions at 51.9, though all three still declined relative to July on concerns about elevated inflation and gas prices; 1-year inflation expectations were revised down to 4.0% from 4.3% while the 5-year figure held at 3.3%.
• New Home Sales fell -10.5% M/M in July to 607,000 units SAAR, the largest monthly decline since January’s -20.3% drop and below forecasts of 620,000, leaving them -6.3% Y/Y, with the median new home price down to $393,800, the lowest since July 2021; existing homes make up roughly 87% of the market, and both the Case-Shiller 20-City and FHFA indices rose for a second straight month to new all-time highs, up +2.08% and +2.30% Y/Y respectively.