According to the National Association of Manufacturers’ (NAM) Monday Economic Report for this week, inflation is slowing.  In July, the Consumer Price Index increased 0.2%, marking a 12-month increase of 2.9%, the smallest increase since March 2021.  Although the rate of inflation remains above the Fed’s target rate believed to be in the 2% range, July’s print indicates that inflation continues to trend in the right direction. However, shelter costs continue to rise with housing affordability challenges continuing amidst elevated interest rates and high home prices.  Builders remain pessimistic and U.S. home construction fell to its lowest level since May 2020.  

Despite mixed economic signals, consumer spending remained strong in July with U.S. retail and food services sales growing 1% and surpassing expectations of a 0.4% rise.  Consumers continue to watch the economy as the presidential campaign progresses and inflation potentially stabilizes at lower levels.