Weekly Economic Recap: 9.14-9.20 2026

Weekly Economic Recap: September 14 – September 20, 2026

Last week brought a Fed rate hike, a rebound in retail sales, and further signs that housing affordability is under pressure as mortgage rates hit new multi-year highs.

Inflation

CPI: August inflation data (released the prior week) showed headline CPI up 0.4% month-over-month, the largest monthly gain in three months, driven by a 3.9% jump in gasoline prices tied to US-Iran tensions. Year-over-year headline inflation held at 3.4%, while core CPI eased to 2.4% annually — its lowest reading since March 2021.

PPI: Producer prices rose 0.4% for the month, pushed higher by a 1.1% jump in goods prices. Year-over-year producer inflation accelerated to 5.4% from 4.8%.

Consumer Inflation Expectations: The NY Fed's survey showed the one-year outlook holding at 3.6%, though individual categories moved higher — gas expectations rose to 4.6%, rent to 6.6%, and medical care to 9.1%.

Labor Market

Jobless Claims: Claims data continued to point to a resilient labor market. By week's end, the 4-week average had edged down to 203,250, and initial claims fell to 196,000 — the lowest since July's 60-year low. Continuing claims dropped to 1.73 million, the lowest since January 2024.

ADP Employment Change: Private employers averaged about 16,250 new jobs per week over the four weeks ending August 29 — an acceleration from the prior four-week pace of 12,250.

Federal Workforce: Claims tied to federal employees ticked up slightly, a continued reminder that public-sector workforce reductions are still filtering through the data.

Consumer Sentiment

Michigan Consumer Sentiment fell to 47.8 in early September — a second straight monthly decline and the weakest reading since May's record low. Sentiment now sits 16% below February levels and 13% below a year ago. Year-ahead inflation expectations jumped to 4.6%.

The Fed

The Federal Reserve raised its benchmark rate by 25 basis points to 3.75%–4.00%, the first hike since 2023, citing persistently elevated inflation. Most officials (16 of 18) project at least one more hike this year. The Fed also raised its GDP growth forecasts (2.3% for 2026, 2.4% for 2027) and inflation expectations, while lowering its unemployment projection to 4.1%.

Housing

Mortgage Rates: The MBA 30-year fixed rate climbed to 6.97% for the week ending September 11 — the highest since May 2025, and up 88 basis points since Iran-related strikes began in late February. Total mortgage applications fell 4.1%, the biggest weekly drop since July, with refinancing down 8.8%.

Retail Sales: Retail sales rose a strong 1.2% month-over-month in August — the best gain in five months — led by gasoline stations. The core "control group" measure jumped 1.4%, well ahead of the 0.4% forecast.

Housing Starts: Housing starts fell 2.6% month-over-month to a seasonally adjusted annual rate of 1.275 million units, the second straight decline and lowest level since October 2025. Multi-family starts plunged 22.5%, while single-family starts rose 7.6%.

The Bottom Line

Energy prices remain the dominant thread running through this data — lifting inflation, pressuring consumer sentiment, and keeping mortgage rates elevated. The Fed's first hike since 2023 adds another layer of tightening just as housing affordability is already strained. With starts falling and mortgage rates near 7%, the housing market heads into fall facing a tougher borrowing environment, even with retail spending and labor data holding up better than expected.