The economy and inflation have been significant topics recently. Prices at grocery stores and gas stations have risen, affecting both households and businesses.
US Economy Shows Limited Growth
From April to June, the U.S. economy expanded at a rate of 1.5%. Increased imports negatively impacted growth. However, consumer spending showed strength. Inflation, while increasing more slowly, stayed above the Federal Reserve’s 2% target.
According to the Commerce Department, this growth rate was lower than the 2.1% seen in the first quarter and fell short of economists’ predictions. Consumer spending, which makes up the majority of the economic activity, increased by 3.2% annually. Business investment, excluding housing, grew at 8.4%, driven by investment in artificial intelligence.
Morgage Rates Climb
U.S. mortgage rates increased for the fourth week in a row, reaching a yearly high. This rise complicates life for potential homebuyers. The rate for 30-year fixed mortgages increased to 6.66% from 6.58%. One year ago, the rate was 6.72%. The rate for 15-year mortgages, often used for refinancing, also went up to 6.04%.
Consumer Confidence Takes a Hit
Consumer confidence decreased as gas prices climbed, influenced by U.S.-Iran tensions. The Conference Board reported a drop in the index to 90.8 in July. Confidence had been higher in late 2024 and early 2025, with readings over 100. June saw slight improvements when gas prices fell to $3.70 per gallon but rose again to $4.11 in July.
Stock Market Fluctuations
The U.S. stock market experienced volatility but concluded the week with gains. Amazon saw increases, while Apple decreased. Rising oil prices fueled inflation worries. Crude prices rose to $88.68 per barrel, causing gas prices to reach nearly $4.11, up from $3.85 a month prior.
Federal Reserve Rate Decision
The Federal Reserve maintained its key interest rate, despite pressure from three dissenting officials. This marks the fifth consecutive meeting with the rate at 3.6%. While some analysts predicted a rate hike, the decision may have little immediate impact on consumers facing high credit card and mortgage rates.
Unemployment Benefits Filing Increase
Unemployment benefit applications increased, though layoffs remain historically low. Applications rose by 9,000 to 197,000 for the week ending July 25. This aligns closely with analysts’ expectations of 207,000. Filings offer a near real-time view of job market health.