We have a very busy few weeks of economic news. While the stock market was reaching record highs in July, the month closed with some important news. As July came to a close, the initial reading of economic growth for the second quarter was released. The 2.8% growth rate was seen as better than expected. Then we saw the Fed’s favorite measure of inflation, the Personal Consumption Expenditures Index, which showed inflation continuing to subside.

These two reports were the most significant recent data the Federal Reserve’s Open Market Committee had to ruminate about when they met over the last two days of July. As expected, the Fed did not lower interest rates. However, their statement regarding progress on the war against inflation has given the market hope that their next meeting in September could result in a rate decrease. The markets have already started salivating over this possibility.

Finally, we had the July jobs report released at the end of last week. The economy added 114,000 jobs in July, less than expected. Furthermore, the previous two months of data were revised downward by 29,000 jobs. The headline unemployment rate rose to 4.3%. Wages grew by 0.2% from the previous month and 3.6% annually. This was the first major data released after the meeting of the Fed and taken as a whole, this report will serve to bolster the Fed’s statement about future rate cuts. Of course, with no meeting in August, there will be much data released before they meet again.