The economic data released this morning, July 17, 2025 at 08:30am ET, paints a clear picture: inflation is not accelerating. It’s cooling, and the Fed has breathing room.
Import prices rose just 0.1% month-over-month in June, with the year-over-year rate at -0.2%. That’s deflationary. Export prices jumped 0.5% MoM and 2.8% YoY, but that’s external-facing. It doesn’t feed domestic inflation. Trade channels are soft.
Retail sales came in strong:
- +0.6% MoM, a clean beat versus last month’s -0.9%
- +3.9% YoY, up from 3.3%
- Control group rose 0.5%
- Ex-autos also up 0.5%
That’s demand resilience, not overheating. Consumers are spending, but prices aren’t surging.
Jobless claims dropped to 221,000, below consensus. The 4-week average fell to 229,500 from 235,750. Labor market is tight, but not triggering wage spiral.
Philadelphia Fed Manufacturing Index jumped to 15.9, up from -4. That’s a sharp rebound in sentiment. No pricing spike reported.
Bottom line: inflation is cooling, trade prices are soft, and consumer demand is firm without overheating. The Fed has room. Rate cut odds for September just ticked higher.