PNC Economics Research Weekly Economic Roundup

PNC Economics Research 10 August 2026

Weekly Economic Roundup PNC Economics

Headlines Gus Faucher  In a very soft July jobs report, the U.S. economy shed 23k jobs on the month versus the consensus expectation of +85k. Job growth in June and May was Jay Hawkins also revised down by a total of 103k, bringing the three-month average of

job growth down to just 20k. Surprisingly, even with outright job losses, the Ershang Liang unemployment rate declined slightly in July to 4.1%. Wage growth was weak at just 0.1% m/m, bringing the year-over-year growth down to 3.15%, close to the pre-pandemic pace. There is little evidence that the labor market Brian LeBlanc itself is a meaningful source of inflation pressure today.

Rayhan Momin  All eyes will be on the CPI report this week. A relatively soft print for core CPI would likely reinforce the muted July jobs report and further reduce market expectations for a fed funds rate hike in 2026. A strong reading, however, Isfar Munir could quickly put rate hikes back on the table.

Alex Mackle  We remain cautiously optimistic that core inflation will continue to cool, supporting the wider disinflation narrative from here on out. Wage pressures have continued to moderate, while the labor market appears broadly Kurt Rankin balanced, suggesting limited underlying inflationary pressure from labor- intensive service sectors. Whilst the new Section 301 tariffs pose some risk to the goods inflation outlook, we estimate that the increase in the effective tariff rate will be modest, with any impact unlikely to show up in the July data given the timing.

 Q3 GDP growth signals have started out strong, with the Atlanta Fed’s current quarter estimate currently at 5.8% annualized. While this is encouraging, much of the strength can be attributed to measurement nuances and growth momentum from Q2.

 The CPI report will be top of mind this week, but there are several other important data releases, including PPI, July retail sales and the University of Michigan Consumer sentiment survey.

PNC Economics Research 10 August 2026

Jobs decline 23k in July with big Figure 2: Unemployment rate downward revisions 4.8%

4.6% The U.S. economy shed 23k jobs in July versus the 4.4% consensus expectation of +85k. Perhaps more 4.2% importantly, job gains in May and June was revised 4.0% down a cumulative 103k, which takes out much of the momentum in job growth observed in the second 3.8%

quarter. The three-month moving average of job 3.6%

growth fell to just 20k per month through July. 3.4%

3.2% Figure 1: Nonfarm payroll job growth '22 '23 '24 '25 '26 300k Sources: BLS, PNC 250k 200k 150k Wage growth remained subdued in July, rising just 100k 0.1% m/m and slowing to 3.15% year-over-year, 50k roughly in line with pre-pandemic norms. Despite the 0k decline in the unemployment rate there is little -50k -100k evidence that the labor market is generating -150k meaningful inflation pressures today. If anything, the -200k continued moderation in wage growth should ease '23 '24 '25 '26 concerns among Fed officials that a tight labor 3M MA Monthly Change market could complicate the ongoing disinflation Sources: BLS, PNC process.

Job losses were concentrated in local government Figure 3: Private sector wage growth (% chg., y/y) (-57k) and leisure/hospitality services (-40k), which are 6.5% the two industries that experience the largest 6.0% seasonal hiring swings during the summer months. It’s 5.5%

very possible that some of the weakness in July was 5.0%

overstated due to seasonal adjustment issues, but 4.5% 4.0% nevertheless this is a disappointing jobs report, 3.5% especially with the downward revisions. It’s odd that 3.0% there was essentially no positive impact from the 2.5% World Cup on leisure/hospitality job growth across 2.0% the summer payroll reports, another factor suggesting '22 '23 '24 '25 '26 some of the July weakness could be attributable to Sources: BLS, PNC seasonal adjustment. According to the fed funds futures market the Despite the outright decline in jobs the unemployment probability of a rate hike at the September Federal rate fell to 4.1% in July from 4.2% in June, its lowest Open Market Committee meeting fell from around…