As we head into September, the U.S. economy continues to show signs of moderation. Inflation has eased somewhat, with consumer prices rising 3.4% over the past year in July, down from 3.5% in June. While prices are still rising faster than the Federal Reserve’s 2% long-term goal, the latest data suggest that inflationary pressures may be gradually cooling.

The labor market and consumer spending are also showing signs of slowing. U.S. retail sales declined in July for the first time in nine months, while recent employment data have added to concerns about a softer economy. These developments could give the Federal Reserve more reason to take a cautious approach to interest rates.

Interest rates remain a key focus heading into fall. The Federal Reserve held its target federal funds rate at 3.50% to 3.75% in July, noting that inflation remains elevated and economic conditions continue to require careful consideration. The Fed is scheduled to meet September 15-16, when it will reassess the latest inflation, employment and economic data.

For consumers, the current environment is a good reminder to focus on what you can control. Review your budget, maintain a healthy emergency fund, pay attention to high-interest debt and make sure your savings are working toward your goals. Whether you’re saving for the future or considering a major purchase, ALLIANCE is here to help you make informed financial decisions.

– Clay Beardemphl, CFO