The economy, inflation and how those forces could impact the lives of Americans were front and center over the past week. Trips to the grocery store and gas station are more painful than they were last year, and rising costs are impacting the decisions of both households and businesses.
Here’s a snapshot of prominent economic data and news that occurred over the past week and what it potentially means for you.
The Federal Reserve raised its benchmark interest rate Wednesday for the first time since 2023 in an effort to quell stubbornly high inflation, and the central bank signaled another rate hike could occur later this year.
The quarter-point increase lifts the Fed’s key rate to about 3.9% and, over time, could result in higher borrowing costs for mortgages, auto loans and credit cards. In a set of quarterly projections, the Fed also signaled its rate-setting committee could raise it a second time to 4.1%.
The move comes as Americans are already struggling with high costs for groceries, gas and housing. Affordability has taken on a leading role in the upcoming midterm elections, just seven weeks away.
Home shoppers holding out for relief from rising mortgage rates may be in for a long wait.
The weekly average rate on a 30-year fixed-rate home loan has been rising for months and this week climbed to just below 7% – its highest level in over 19 months.
The benchmark 30-year fixed rate mortgage rose to 6.95% from 6.76% last week, mortgage buyer Freddie Mac said Thursday. One year ago, the average rate was 6.26%.
This is the fourth week in a row that mortgage rates have moved higher. The average rate hasn’t reached this level since Jan. 30, 2025.
Borrowing costs on 15-year fixed-rate mortgages, often sought by borrowers refinancing a home loan, also rose this week. That average rate increased to 6.26% from 6.09% last week. A year ago, it was at 5.41%.
Consumers stepped up their spending at a better-than-anticipated pace in August after an unexpectedly sharp pullback in July.
Retail sales rose 1.2% last month after recording a revised 0.5% dip in July, according to Commerce Department data released Wednesday. Economists were expecting a 0.7% gain for the month, according to FactSet.
The decline in July was notable because there had been few signs of fatigue from U.S. consumers. Americans spent heavily during the World Cup and Amazon Prime Day sales this summer. That followed heavy retail traffic in April and May as Americans dipped into their government tax refunds.
Excluding business at gas stations, retail sales rose 1.1% in August. The government figures aren’t adjusted for inflation.
Sales at clothing and accessories stores were up 0.7%, while furniture and home furnishings stores saw a 0.9% increase. Online retailers registered a 2.6% gain.
The number of people applying for unemployment benefits dropped sharply last week, another sign that layoffs remain rare and most Americans enjoy job security.
The Labor Department reported Thursday that jobless claims slid to 196,000, the fewest since mid-July and down from 206,000 the week before. The four-week average of claims, which smooths out week-to-week volatility, dropped to 203,250.
Economists had expected claims to come in at 207,500, according to a survey by the data firm FactSet.
Claims for jobless benefits are a proxy for layoffs, and economists watch them because they can be a sign of where the job market is headed. For the past year, claims have mostly stayed within a historically low range of 200,000 to 230,000 a week.
Wall Street stumbled to close out an up -and- down week.
The S&P 500 was virtually unchanged in the final day of trading, while the Dow Jones Industrial Average was down. The Nasdaq composite was fighting to stay positive, but just barely.
The price for a barrel of Brent crude, the international standard, got to nearly $110 early this week, up from a little over $70 in July. It has been seesawing since.
It briefly dropped below $102 in overnight before erasing much of the loss and pulling back to $104.07. But oil pointed lower for the week.
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