The final trading week saw a number of important data points were released. On Thursday, it was revealed that the economy grew by 3.3 percent over the past three months, which was higher than the projected 3 percent rate.

This is seen by many as vindication of President Trump’s ability to keep the economy growing despite the risk of inflation from implementing a tariff strategy. However, the PCE Price Index found inflation was up to 2.9 percent, which is the highest since February.

The Fed typically relies more on this report when determining how close or far away it is to its target of 2 percent inflation. It’s unclear whether the Fed is still on track to cut interest rates in September given the relative strength of the economy and the possibility of further price increases.

Still, the .3 percent monthly increase in the PCE Price Index was in line with expectations. It’s safe to assume that Jerome Powell’s comments about potential cuts at Jackson Hole last week were made with the assumption that inflation would be at roughly the levels revealed on Friday.

Consumer spending was up by .5 percent and personal income was up .4 percent on a monthly basis. This gives more evidence to show that consumers are resilient and the economy remains strong even in the face of potential inflationary pressures.

The final important piece of news this week came out on Thursday in the form of the unemployment claims figures for the past seven days. Over the past week, there were 229,000 claims compared to an expected 231,000. Last week, there were 234,000 requests for benefits.

The S&P 500 was stuck in a tight trading range this week, finishing up a little more than four points to close at 6,460. This was an increase of .07 percent for an index that was up about 1 percent in August. Still, the index is about 40 points from all-time highs and is expected to continue making gains throughout the rest of the year. For the week, the market made a low of 6,433 on Tuesday morning and made its high of 6,505 on Thursday.

The Dow was also stuck in a tight range this week finishing up 13 points to close at 45,544, an increase of .03 percent. Over the past month, the Dow has gained 1.34 percent. For the week, the market made its low on Tuesday when it dipped to 45,226 and made its high of 45,648 on Thursday.

The Nasdaq gained.01 percent to close on Friday at 21,455. For the month, the index gained just over 1 percent. For the week, the index made its weekly low of 21,398 on Tuesday and a high of 21,724 on Thursday.

In international news, Australia announced on Tuesday night that inflation had accelerated to 2.8 percent on an annualized basis. This was much higher than the projected 2.3 percent and the 1.9 percent announced in July. On Thursday, Switzerland announced that its GDP for the last quarter grew by .1 percent. On Friday morning, Canada announced that its GDP dropped by .1 percent over the past month.

The upcoming week will have the ADP nonfarm payroll report released on Thursday while the BLS version comes out on Friday. The JOLTS report as well as the ISM Services PMI are also scheduled for release next week.

This past week was yet another consequential one for the markets, highlighted by indications that the Fed might be ready to lower interest rates.
On Wednesday, the Fed released its minutes from the July meeting. One key takeaway is that many voting members are still concerned about inflation and the impact that tariffs are going to have on the labor market. However, there was a consensus that there is enough evidence available to support rate cuts at some point this year.

The minutes also showed that higher inflation was a bigger concern compared to higher unemployment. Therefore, rate cuts will likely be a tool to keep prices down even if a recession is the result of such a tactic.

On Thursday, unemployment claim data was released and revealed that 235,000 people applied for benefits compared to an expected 226,000 over the past seven days. Also, the Flash Manufacturing PMI and Flash Services PMI reports came out. Manufacturing came in at 53.3 compared to an expected 49.7 whereas services came in at 55.4 compared to an expected 54.2.

On Friday, Jerome Powell spoke at the Jackson Hole Symposium, stating the Fed was meeting its dual mandate. He mentioned that employment was close to capacity and inflation for the moment was manageable. Overall, his comments seemed to add credence to the idea that cuts were coming even if he didn’t seem all that excited about doing so.

The S&P 500 closed the week up .25 percent to finish at 6,466. This represented an increase of just under 16 points since the start of trading on Monday. The market made its low of the week on Wednesday when it dipped to 6,351 before reversing and hitting a high of 6,477 on Friday. The index is currently up 2 percent in August and just over 16 percent over the past 12 months.

The Dow was up 1.51 percent this week to close at 45,631 at the close of trading on Friday. This was an increase of 680 points for an index that spent most of the week in the red before gaining over 800 points on the final day of the trading week. The index made its low of the past five days on Thursday when it fell to 44,685. On Friday, it made its high when it peaked at 45,751. In August, the Dow has gained roughly 2.5 percent and is up 12 percent over the past 12 months.

Finally, the Nasdaq was down about 122 points this week to close at 21,496. On Monday, the index made its high of the week at 21,625 before trending down the rest of the week. On Wednesday, the Nasdaq made its weekly high when it dipped to 20,962. Despite the weekly loss, the index is up about 2 percent over the past month.

In international news, Canada announced Tuesday morning that inflation was up .3 percent over the past month and hit 3.1 percent on an annual basis. Tuesday night, New Zealand announced that it would lower its key interest rate by 25 basis points to 3 percent. On Wednesday morning, Great Britain announced that inflation in that nation hit 3.8 percent on an annualized basis.

This coming Thursday will have initial GDP numbers for the second quarter being released. The PCE Price Index comes out on Friday. International traders may be interested in the Australian CPI release on Tuesday night as well as the Canadian GDP release on Friday morning.