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August Economic Review: Another month of expansion, but storm clouds are building

Economic Review: Positive consumers, but manufacturing is slowing (Page 3)

Growth eased a bit as the expansion entered its record eleventh year in July as manufacturing activity slows further – in part from the expanding trade war between the U.S. and China. Consumer spending was still strong, however, spurred by the solid labor market and higher wages.

Financial Markets Review: A good July disintegrates in early August (Page 4)

Domestic equities had a strong July with gains exceeding one percent for all three market cap groups. But then it all fell apart in early August after the July FOMC meeting, the July employment report, and the President’s decision to impose additional tariffs on China (and the Chinese response).

The Outlook: Rising risks likely mean further easing (Page 5)

Downside risks to the record-long economic expansion and the uncertainty associated with the forecast are both currently higher than normal given the trade war between the U.S. and China. It is unlikely that the Fed will spend much time on the sidelines should the outlook deteriorate much further.

Go deeper with the full August report linked below.

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