2025 m. rugpjūčio 18 d.

August 11–15, 2025: Weekly economic update

Key market updates

Macroeconomic Statistics

Inflation (CPI):

Core Consumer Price Index (CPI) (m/m) (June): 0.3% (prev: 0.2%)
Consumer Price Index (CPI) (m/m) (June): 0.2% (prev: 0.3%)
Core CPI (y/y) (June): 3.1% (prev: 2.9%)
CPI (y/y) (June): 2.7% (prev: 2.7%)

Inflation Expectations (Michigan):

12-month expected inflation (August): 4.9% (prev: 4.5%)
5-year expected inflation (August): 3.9% (prev: 3.4%)

Producer Price Index (PPI):

PPI (m/m) (August): 0.9% (prev: 0.0%)
Core PPI (m/m) (August): 0.9% (prev: 0.0%)

GDP (U.S. Bureau of Economic Analysis, BEA):

2Q25 annualized, preliminary estimate: 3.0% (1Q2024: –0.5%)
Atlanta Fed GDPNow (2Q): 2.5% (vs 2.5%) (The GDPNow model provides a “real-time” version of the official estimate before its publication, using methodology similar to that of the U.S. BEA.)

Business Activity Index (PMI) (above 50 = expansion, below 50 = slowdown):

Services sector (July): 55.7 (prev: 52.9)
Manufacturing sector (July): 49.8 (prev: revised 52.0)
S&P Global Composite (July): 55.1 (prev: 52.9)

Labor Market:

Unemployment rate (June): 4.2% (prev: 4.1%)
Nonfarm payrolls (June): +73K (prev: revised 144K)
Private nonfarm payrolls (June): +83K (prev: 137K)
Average hourly earnings (y/y, June): 3.9% (prev: 3.8%)
JOLTS job openings (May): 7.769M (vs 7.395M)

Monetary Policy

Federal Funds Rate (EFFR): 4.25%–4.50% (target range)
Fed balance sheet: $6.643T (vs last week: $6.42T)

Market Rate Forecast (FedWatch):

Today:

One week ago:

Commentary

Last week, the stock markets remained in Risk-on mode. The consumer inflation data came out mixed and were received moderately positively by the market. On the one hand, the monthly CPI showed a smaller growth in July of +0.2%, compared to a growth of 0.3% in June. On an annualized basis, the CPI is an unchanged 2.7%, but on the other hand, the core CPI rose to 3.1% (vs 2.9% in June) - this is a clear reversal upwards.

Also on Thursday, the data on manufacturing inflation (PPI) was released. The index showed a growth (mo/m) of 0.9% in July, adjusted for seasonality, which was the largest growth since June 2022. On an unadjusted basis, the index rose 3.3% in the 12 months ending in July, the largest 12-month gain since a 3.4% increase in February 2025.

This increase suggests that companies are not absorbing the higher import costs associated with tariffs.

The CPI reflects current inflation, and the PPI reflects future inflation. Accordingly, the latest PPI release increases the likelihood of higher consumer inflation releases in the coming weeks. In this scenario, the Fed's rhetoric could remain moderately tight.

In addition, inflation expectations have risen: 12M 4.9% and 5Y 3.9%.

However, market expectations for Fedwatch remain positive:

For the next meeting (September 17): the estimated probability of a rate cut is 84.3%;
For the next 12 months: 5 steps of reduction by 0.25% to the range of 3.00-3.25%.
2 reductions remain until the end of the year.

Trade Wars through the Lens of U.S. Trade Balance

U.S. goods trade deficit (12 months to 2Q25): $1.353T.
Asia: $816B (60%) — China $280B (21%), rest of Asia $536B (40%).
EU: $273B (20%).
Mexico: $185B (14%).
Canada: $60B (5%).

Stock Market

Weekly median growth: +1.41%. Leaders: basic materials, consumer cyclicals, healthcare.

YTD: +0.42%. Leaders: utilities, basic materials, communication services. Laggards: technology (–7.96%), healthcare (–10.93%).

Indices:

S&P 500: +0.94% (weekly close 6449.79). YTD +9.26%.

Nasdaq 100: +0.43% (weekly close 23712.07). YTD +12.27%.

Euro Stoxx 600: +1.09% (weekly close 555.1). YTD +9.79%.

CSI Index (China): +2.37% (weekly close 4202.35). YTD +6.90%.

China/Trade:

Trump to allow some U.S. chip sales to China; extended truce with Beijing for 3 months (until Nov 10).
Chinese indices rose, respectively.
Hang Seng TECH Index: +1.52% (weekly close 5543.17). YTD +24.94%.

Buybacks:

July: U.S. companies announced buybacks of $166B — largest July in 20 years.
Interpreted as confidence in market resilience.
But insider selling is high: e.g., Amazon founder Jeff Bezos sold $1.51B worth of shares in July.

Bond Market

Treasury yields rose (negative reaction to inflation data).
20+ Yr Treasury ETF (TLT): –1.02% (close 86.40). YTD –1.59%.

Yields & Spreads (2025-06-30 vs 2024-07-07):

U.S. 10-yr Treasury yield: 4.31% (vs 4.27%).
ICE BofA BBB U.S. Corporate Index yield: 5.12% (vs 5.14%).
10y–2y Treasury spread: 56 bps (vs 51).
10y–3m Treasury spread: 8 bps (vs 2).

Commodities

Gold (futures, GC):

–2.21% (weekly close 3381.7 $/oz).
YTD +28.05%.
Since April, trading range: 3250–3450 $/oz.

U.S. Dollar Index (DX futures):

–0.39% (weekly close 97.705).
YTD –9.81%.

Oil (CL futures):

–0.33% (weekly close $63.14/bbl).
YTD –12.12%.
Current supply/demand balance does not favor higher oil prices.

OPEC+:

2025 demand forecast unchanged: 105.14M bpd (+1.29M).
2026 demand revised upward: 106.52M bpd (+1.38M vs 1.28M).
Production adjustment: in Sept 2025, 8 members to cut 547K bpd vs Aug levels (equivalent to 4 monthly increases reversed).
Flexibility allows suspension of rollback if market conditions change.

EIA (U.S. Energy Information Administration):