Economy

The ISM Manufacturing PMI rose to 55.6% in July 2026, its highest reading since May 2022, with 15 of 18 industries expanding and employment entering growth for the first time in 33 months. Despite those headline gains, the Prices Paid index remained at 71.1% for a sixth consecutive month above 70%, and 62% of respondent comments were negative, with pricing volatility cited in 57% of negative remarks and the Iran conflict in 43%. A separate S&P Global survey held steady at 53.9% for July but flagged slowing production and order growth, pointing to different momentum signals from the same month.

The Federal Reserve's July 2026 Senior Loan Officer Opinion Survey, covering 56 domestic banks and 18 foreign bank branches, found net-zero tightening for C&I loans to large and middle-market firms and net easing across all three commercial real estate categories, with nonfarm nonresidential loans showing the largest ease at negative 11.3 percent. This marks a notable shift from the April 2026 survey, which recorded net tightening of 8.1 percent for large and middle-market C&I loans and positive net tightening in construction and land development CRE. Residential mortgage demand was weaker across all seven product categories, while C&I loan demand strengthened on net for large and middle-market firms at 16.1 percent.

The Census Bureau reported June 2026 construction spending at a seasonally adjusted annual rate of $2,166.5 billion, down 0.1% from May and 3.2% below June 2025, with residential construction leading the monthly decline at 0.3%. The BEA's advance Q2 GDP estimate, which showed 1.5% annualized growth, used a projected figure for June nonresidential structures rather than actual data, and that projection's value was not disclosed. Because the projection is unknown, it is not possible to determine whether the actual June figure will push a subsequent GDP revision up or down.

The Bureau of Labor Statistics published its June 2026 Job Openings and Labor Turnover Survey today at 10 a.m. Eastern, following a May baseline of 7.6 million openings, a 4.6 percent openings rate, and a quits rate of 1.9 percent that held flat from April. The report tracks job openings, hires, quits, and layoffs across nonfarm employers, with the quits rate and openings-to-unemployed ratio serving as key indicators of worker confidence and labor market tightness. The data arrives as the Federal Reserve holds its federal-funds rate at 3.5 to 3.75 percent amid elevated inflation, with three FOMC members having dissented in favor of a rate increase at the July 29 meeting.

John Williams, President of the Federal Reserve Bank of New York, expects core PCE inflation, currently at 3.3% annually, to decline gradually through 2027 and reach the Fed's 2% target in 2028, consistent with June FOMC median projections. The FOMC held the federal-funds rate at 3.50%–3.75% on July 29, though three members dissented in favor of an immediate quarter-point increase. Williams stated the Fed would raise rates if disinflation stalls, making the path of tariff and energy-price pressures the key variable to watch in coming months.