top of page

August Economic Update

Market Summary

Historically, the summer months have been a time when the stock market can tend to slump as vacations are plentiful and economic news slows. This was not the case in July as the market posted respectable gains on Wall Street. The S&P gained 3.60% for the month and finally managed to break its price range which began back in February, but remains under its all-time high set back in January. The tech-heavy Nasdaq, which had outperformed the S&P for the past several months, eased its pace but gained a healthy 2.15%. (1)


For the year, all three of the major U.S. indices are firmly in the green as of the close on July 31:

S&P 500: +2.82% Nasdaq: +11.13% Dow Jones: +2.82% (1)

Tariffs Update

The ongoing trade feud with China, Canada, Mexico, and the European Union continues as negotiations and compromises were made, along with new threats between the U.S. and China. The Trump administration has considered increasing tariffs from 10% to 25% which would take effect this fall. China once again retaliated with additional tariffs of their own for U.S. imports. (2)

To our North, Canada acted to impose a 25% import tax on American steel products and a 10% import tax on assorted U.S. consumer, food, and agriculture exports coming through its borders. On July 25, President Trump and European Commission President Jean-Claude Junker agreed to lower the respective industrial tariffs postpone others (such as the planned 25% U.S. tax on European-built autos) pending further talks. (2,3)

The U.S. Economy

The most recent jobs report from the Department of Labor showed a net gain of 157,000 jobs in July. Wages were also rising at a rate of 2.7% a year by the end of the second quarter of 2018. One side effect of a healthy economy is inflation. The latest CPI index showed inflation increasing at 2.9% per year, which is the highest rate since February of 2012. (4,5)