Uncertainty Ahead: What Markets, Housing, and Jobs Are Telling Us

Markets wrapped up the week with strong gains, boosted by new signals from the Fed and a series of important economic reports. Here’s a breakdown of what drove the action and what to watch in the days ahead.

Fed Shifts the Tone

Jerome Powell used his Jackson Hole speech to open the door to a potential September rate cut. That was enough to fuel a big rally in U.S. equities, even as he warned that inflationary risks remain.

• Market reaction: Dow jumped 800 points (+1.9%), S&P 500 gained 1.5%, Nasdaq up 1.9%.
• Rate cut expectations: Odds of a September cut rose from 70% in the morning to over 91% by market close.
• Powell’s balance: Inflation pressures—especially from tariffs—are still “clearly visible,” but weaker growth may warrant easier policy.

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Housing Market: Resilient but Fragile

Housing data was mixed, with some signs of strength but also underlying pressures that could slow momentum in the months ahead.

• Existing home sales rebounded 2.0% in July to 4.0 million units, bringing activity back to its January trend.
• Inventory rising: 1.36 million homes on the market, the highest since 2020. This has slowed price appreciation to just 0.3% year-over-year.
• Housing starts rose 5.2% in July, with gains in both single-family (+2.6%) and multi-family (+9.9%) construction.
• Permits falling: Down 12% since February, pointing toward weaker activity ahead.

Key Takeaway: Single-family demand, supported by builder incentives, has been remarkably resilient—but momentum is fading. Meanwhile, the multi-family sector is benefiting from affordability pressures, as more Americans are priced out of ownership.

Labor Market Weakening

The labor market picture is beginning to erode, and that weakness is closely tied to softer housing demand.

• Initial unemployment claims are creeping higher, though still not at crisis levels.
• Continuing claims are rising faster, signaling it’s taking longer to find new jobs.

Key takeaway: While job losses remain localized, the trend is worrying. A Fed rate cut may not directly reduce mortgage rates, but it could help restore consumer confidence at a time when long-term commitments like buying a home feel riskier.

Key Data to Watch This Week

Markets will turn their attention to three important releases that could set the tone heading into September.

• New Home Sales (Monday): Expected to fall to 627K from 635K despite incentives like mortgage buydowns and price cuts.
• Durable Goods Orders (Tuesday): Forecast to decline 1.5% due to weaker aircraft demand, with only a slight +0.2% rise excluding transportation.
• Personal Income & Spending (Friday): Both projected to rise 0.5% in July. Inflation pressures are firming, with the PCE deflator expected at +0.3% for the month and trending toward 3% by year-end.

The Bigger Picture

The U.S. economy is caught between persistent inflation and slowing growth. Housing and labor markets remain resilient but are showing cracks, while consumers are becoming more cautious with discretionary spending. September could prove pivotal as the Fed weighs how much support to provide in an environment where tariffs are adding fuel to inflationary pressures.

At FTR, we understand how challenging it is to make confident decisions when markets are being pulled in different directions by tariffs, inflation, and shifting Fed policy. Our Freight•cast methodology is designed to cut through the noise, turning complex data into clear, actionable intelligence. Whether it’s understanding how housing trends affect freight demand, or how policy changes ripple through supply chains, FTR equips companies with the insights they need to plan strategically instead of reacting to uncertainty.

In uncertain times, trusted intelligence makes all the difference—and that’s where FTR helps you stay ahead.

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