Low Activity in the Economy Apart From Resilient Consumers
Current data as of 7 August 2026
The U.S. labor market showed weakness in July. Meanwhile, consumer demand and business investment continued to support the economy, as shown in the advance estimate of the second quarter U.S. GDP. In the housing sector, Phoenix home prices continued to decline over the year, while building permits recovered moderately.
The U.S. unemployment rate held at 4.1% in July, with total nonfarm payroll decreasing by 23,000, according to the Bureau of Labor Statistics’ August 7th employment situation summary. Labor force participation rate edged down to 61.4%, and the employment-population ratio slid by 0.1 percentage point to 58.9%. Payroll employment declined by 50,000 in Local Government Education over the month, 19,000 in Retail Trade, and 14,000 in Financial Activities. Health Care employment continued the upward trend, rising by 22,000 during the month; this pace is slower than the 12-month average gain of 36,000 per month. – Niaoniao You
State-level Job Openings and Labor Turnover Survey (JOLTS) data were changed to an annual release earlier this year. The inaugural annual estimates for 2025 were released July 22 by the U.S. Bureau of Labor Statistics. Arizona’s annual average job openings rate before seasonal adjustment has steadily declined since 2022, when it was 7.1%. The rate decreased to 5.8% in 2023, 4.9% in 2024, and then to 4.4% in 2025. The annual average hires rate for 2025 was 3.4% compared to 3.5% in 2024, 4.1% in 2023, and 4.8% in 2022. Arizona’s annual average rate for total separations matched the nation’s in 2025, at 3.3%. The annual average quits rate for the state was unchanged in 2025 at 2.1%, while the annual average layoffs and discharges rate has remained relatively flat for several years, with the 2025 rate noted as 1.0%.
The number and rate of job openings in the U.S. changed very little over the month in June, with the rate moving to 4.4% from 4.5% in May. According to the monthly JOLTS, industries with notable increases in job openings for the month were transportation, warehousing, and utilities (+97,000) and federal government (+39,000). Decreases were reported in wholesale trade (-74,000), nondurable goods manufacturing (-55,000), and mining and logging (-9,000). The number of hires was unchanged at 5.3 million while the rate ticked up to 3.4%. Hires declined in the federal government (-6,000). There was little change in the number (5.4 million) and rate (3.4%) of total separations. Within separations, the number and rate of quits were unchanged at 3.2 million and 2.0%, respectively, as were the number (1.8 million) and rate (1.1%) for layoffs and discharges. -Valorie Rice
Real gross domestic product (GDP) increased at an annual rate of 1.5% in the second quarter of 2026, according to the advance estimate released by the Bureau of Economic Analysis. The slowdown from the 2.1% annualized pace in the first quarter was mainly explained by an increase in imports and a decline in government expenditure. Consumer spending (3.2%) and business investment (3.0%), on the other hand, continued to grow steadily, likely related to higher stock valuations and the AI infrastructure buildout. As a result, real final sales to private domestic purchasers growth accelerated to 3.9% in the second quarter from 1.7% in the prior quarter.
The price index for gross domestic purchases increased 5.7% in the second quarter compared with 3.6% in the first quarter, largely due to higher oil prices. The personal consumption expenditures (PCE) price index increased 5.1% compared with 4.6%, while core (excluding food and energy) PCE index eased to 3.4% from 4.4%. -Niaoniao You
June building permits for Arizona totaled 4,840, 6.3% higher than the same month a year ago on an unadjusted basis, yet 18.3% lower compared to June 2025 on a year-to-date basis. Single-family permits fell 2.1% over the year to 2,922. The Phoenix-Mesa-Chandler metropolitan area recorded 3,923 total and 2,114 single-family permits for June, up moderately over the year after very low readings in the prior month. Likewise, the Tucson metropolitan area reported increases in total permits to 437 and single-family permits to 377.
U.S. home prices rose 1.1% over the year in May, up from 0.9% (revised up) in the previous month, based on the S&P Cotality Case-Shiller July 28th release. Phoenix home prices have declined over the year for the past 12 months, registering a 1.3% over-the-year decline in May, compared with a 1.7% decline in April. Home price declines were also evident in Las Vegas (-1.9%), Seattle (-1.8%), Denver (-1.8%), and Tampa (-1.6%). Chicago continued to report the highest annual gain among the 20-city composite, at 6.9% in May, followed by New York (4.2%) and Cleveland (3.1%). This divergence in home prices is consistent with the return to office trend. Real home price declines have continued for the past 12 months, as inflation outpaced national home price appreciation. – Niaoniao You
The U.S. trade deficit shrank in June to $73.3 billion from a revised $77.6 billion in May. Both imports and exports declined monthly, according to the joint U.S. Census Bureau/U.S. Bureau of Economic Analysis release. Exports were at $314.7 billion in June, down $2.9 billion from the month prior, while imports dropped $7.3 billion in June to $388.0 billion. Year-to-date, the goods and services deficit is down 33.8% compared to the same period a year ago. The top countries in which the U.S. reflected a trade surplus were the Netherlands ($7.2 billion), South and Central America ($5.6 billion), and Hong Kong ($3.2 billion). The highest June deficits were with Vietnam ($21.6 billion), Mexico ($20.3 billion), and China ($15.3 billion). – Valorie Rice