Weekly economic and financial commentary

Summary

United States: Can I Get a Price Check?

• The latest inflation data brought some signs of tariff-induced cost pressure, and July retail sales tell us consumers are still spending. But it remains to be seen to what extent firms pass costs on and how much price growth consumers can stomach today.

• Next week: Housing Starts (Tue.), Existing Home Sales (Thu.)

International: Policy Prognostications and Growth Surprises

• This week brought a range of economic developments and data releases across both G10 and emerging markets. In monetary policy announcements, the Reserve Bank of Australia delivered a rate cut while Norges Bank held rates steady. In both the UK and Japan, Q2 GDP surprised to the upside. In contrast, China’s July activity data disappointed, with retail sales and industrial production below expectations.

• Next week: Reserve Bank of New Zealand Policy Rate (Wed.), Riksbank Policy Rate (Wed.), Eurozone PMIs (Thu.)

Credit Market Insights: Young Borrowers: Another Crack in the Economy

• Even as overall borrowing expanded by 1% over the second quarter, cracks are beginning to emerge that reveal increasing vulnerabilities among certain households. Sharp rises in auto loan and credit card delinquencies over the past few years signal stress for young borrowers, a group which has reduced borrowing by 15% since 2023.

Topic of the Week: Signs of Higher Tariffs Filtering through to Selling Prices

• The Producer Price Index (PPI) for final demand rose 0.9% in July, handily beating expectations for a 0.2% increase. Elevated producer prices and wholesale and retail margins indicate firms may be less willing to absorb tariff costs.

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