This Weekly Financial Markets Update reviews the top market headlines: High Inflation Persists in August, Retail Sales Rise in August, Small Business Optimism Improves Modestly
  • The Consumer Price Index (CPI) rose 8.3% in July versus the prior year
  • Retail sales increased 0.3% in August over July
  • The U.S. Small Business Optimism index rose modestly to 91.8 in August

Top Three Market Headlines

High Inflation Persists in August: The U.S. Department of Labor reported last week that the Consumer Price Index (CPI) rose 0.1% in August from July; on an annual (year-over-year) basis, the CPI increased 8.3%, down slightly from the 8.5% annual rate in July. Declining energy prices provided some relief in August, as the price of gasoline fell 10.6% during the month. On the other hand, persistent price increases for shelter, food, and medical care continued to pressure the broad index. Excluding the volatile energy and food sectors, the so-called core CPI accelerated in August, registering a sharp 0.6% monthly increase and 6.3% annual rise, versus 0.3% and 5.9%, respectively, in July.

Retail Sales Rise in August: Sales at retail and food establishments eked out a 0.3% monthly increase in August, according to the Department of Commerce. At the same time, the previously-reported sales figure for July was revised down from flat to a 0.4% decrease. After declining in July, sales at auto dealers rebounded in August, jumping 3.0%. Another area seeing strength was bars and restaurants, which rose 1.1%, suggesting tourism and entertainment were strong at the end of summer. On the other hand, online retail, electronics retailers, and healthcare stores all observed declines in sales, and falling gas prices contributed to a 4.2% decline in gas station sales.

Small Business Optimism Improves Modestly: The National Federation of Independent Business (NFIB) reported last week that its Small Business Optimism Index ticked up in August to 91.8 from 89.9. This was the second straight month the index increased marginally after hitting multi-year lows in June. Although the index rose, this marked the eighth consecutive monthly reading below the 48-year average of 98. The August report noted that 29% of small business owners identified inflation as the primary concern in operating their business, a decline of eight points from July's record high reading. The percentage of owners expecting better business conditions over the next six months improved from July, but remained a net negative 42%, highlighting a continued gloomy outlook.

As of September 19, 2022 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World -4.04% 0.53% -19.76% -17.32%
S&P 500 -4.73% 2.70% -17.80% -12.09%
Russell 2000 -4.46% 5.57% -19.16% -18.44%
MSCI EAFE -2.72% -2.67% -21.71% -22.35%
MSCI Emerging Markets -2.64% -4.76% -21.54% -23.90%
FTSE NAREIT -5.43% -0.03% -20.22% -10.95%
Bloomberg Commodity -1.44% 0.29% 18.78% 19.49%
Barclays U.S. Aggregate -0.93% -2.27% -12.38% -13.19%

NFIB 9/13/2022, WSJ 9/15/2022, US Dept. of Commerce 9/15/22, BLS 9/14/2022, WSJ 9/14/2022. Data from Morningstar Direct. Returns for periods greater than one year are annualized. Gallagher Fiduciary Advisors, LLC ("GFA") is an SEC Registered Investment Adviser that provides retirement, investment advisory, discretionary/named and independent fiduciary services. GFA is a limited liability company with Gallagher Benefit Services, Inc. as its single member. GFA may pay referral fees or other remuneration to employees of AJG or its affiliates or to independent contractors; such payments do not change our fee. Securities may be offered through Triad Advisors, LLC ("Triad"), member FINRA/SIPC. Triad is separately owned and other entities and/or marketing names, products or services referenced here are independent of Triad. Neither Triad, Arthur J. Gallagher & Co., GFA, their affiliates nor representatives provide accounting, legal or tax advice.