Weekly Economic Update
Last Week and the Economy
Last week, major U.S. stock indices delivered mixed results as several multi-week winning streaks came to an end. The Dow Jones Industrial Average gained 0.60%, while the S&P 500 Index lost 1.95%. The NASDAQ Composite registered the largest decline, falling 4.60%. The small-cap Russell 2000 rose by 1.02%, while the international MSCI EAFE index dropped by 1.30%.
First-Quarter GDP Growth Revised Upward to 2.1%
The US Bureau of Economic Analysis [BEA] released its third estimate for first-quarter economic output on Thursday. Real Gross Domestic Product [GDP] increased at an annual rate of 2.1% during the first three months of the year (BEA GDP Report). That figure marks a 0.5 percentage point upward revision from the 1.6% second estimate released in May. It also represents an acceleration from the 0.5% annualized growth rate of the fourth quarter of 2025.
The upward revision primarily reflected a downward revision to imports – which subtract from the calculation of national output. A moderate downward adjustment to consumer spending partly offset that shift. The expansion also showed up across industries. Real value added rose 7.5% for government. Private goods-producing industries added 4.5%. Private services-producing sectors gained 0.8%.
The report also showed stronger corporate profitability. Profits from current production rose $74.4 billion during the quarter – a $34.0 billion upward revision. Real Gross Domestic Income [GDI] increased at an annualized 1.2% rate after a 0.3 percentage point upward revision. The average of real GDP and GDI reached 1.7% for the quarter, a measure that points to steady but unremarkable momentum heading into the second quarter.
May Personal Consumption Expenditures Indicate Persistent Inflation
The Bureau of Economic Analysis also published its personal income and outlays report for May 2026 on Thursday. The headline Personal Consumption Expenditures [PCE] price index climbed steadily through the spring. The index registered a 3.5% annual rate in March and reached 3.8% in April. It then accelerated to 4.1% in May, the highest reading since April 2023.
The core PCE price index excludes volatile food and energy components and serves as a key gauge for Federal Reserve policy. Core inflation followed the same upward path – moving from 3.2% in March to 3.3% in April and 3.4% in May. The latest reading was the highest level since October 2023. The first-quarter price index for gross domestic purchases tells a similar story – rising 3.6% on an annualized basis after a 0.1 percentage point upward revision.
Core pressures held roughly steady from month to month. By contrast, the headline acceleration traced largely to energy. The year-over-year readings stayed well above the Federal Reserve’s 2% target, which keeps the inflation path tied to the direction of oil prices.
US-Iran Ceasefire Frays as Oil Eases From Wartime Peaks
The two sides reached a 60-day memorandum of understanding on June 17, 2026, and oil markets priced in a reopening of the strait. WTI fell to roughly $73.61 per barrel by June 22 – about 20% below the 2026 high. Lower wholesale costs began to ease pressure at the pump.
The truce then frayed. Iranian forces struck a vessel in the strait on Thursday, and hostilities ran for four consecutive days. Iran directed strikes at Bahrain and Kuwait, and the United Nations paused an evacuation of stranded seafarers. Tanker traffic slowed after a brief post-signing recovery, which was accompanied by a halt of the slide in crude price.
Gasoline tracked the same uneven path. The national average for regular gasoline reached $3.87 per gallon on June 28 – up $0.68 from one year earlier. Analysts cautioned that pump prices may not return to pre-war levels until late 2026 or 2027, because refiners must rebuild inventories and restart idled production. Energy remains the dominant force behind the recent inflation surge, and the path of prices through the summer rests on whether the ceasefire holds.
Data Sources for stock and index quotes: Yahoo Finance, WSJ
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Key Economic Data Points
| Data Point | Date | Current | Change from Prior Period | Next Report |
| Unemployment Rate | 05-2026 | 4.3% | No Change | July 2nd |
| FOMC Target Rate | 06-2026 | 3.50% – 3.75% | No Change | July 29th |
| GDP | Q1 2026 (3rd estimate) | 2.1% | +0.5 | July 30th |
| PCE Inflation | 05-2026 | 4.1% | +0.3 | July 30th |
Data Sources: U.S. Bureau of Labor Statistics, Federal Reserve, U.S. Bureau of Economic Analysis, U.S. Bureau of Economic Analysis
Weekly Quote:
You don't have to be great to start, but you have to start to be great.
-Zig Ziglar – Author and motivational speaker
The Week Ahead – Economic Data & Events
Monday: Dallas Fed Manufacturing Survey
Tuesday: Consumer Confidence, JOLTS, Dallas Fed Texas Retail Outlook Survey
Wednesday: ADP National Employment Report, Construction, ISM Manufacturing
Thursday: Employment Situation, Manufacturing, Shipments, and Orders
Friday: None
Weekly Reports: Mortgage Applications (Wednesday), EIA Petroleum Status Report (Wednesday), Jobless Claims (Thursday), EIA Natural Gas (Thursday), Fed Balance Sheet (Thursday), Baker Hughes Rig Count (Friday), New York Fed Staff Nowcast (Friday)
Source: New York Fed
The Week Ahead – S&P 500 Companies Reporting Earnings
Monday: No S&P 500 companies confirmed for this date.
Tuesday: NIKE, Inc. (NKE): AMC, Constellation Brands, Inc. (STZ): AMC
Wednesday: General Mills, Inc. (GIS): PMO, FactSet (FDS): PMO
Thursday: No S&P 500 companies confirmed for this date.
Friday: No S&P 500 companies confirmed for this date.
AMC = After Market Close, PMO = Prior to Market Open
Source: Yahoo Finance
Weekly Tip:
One extra monthly payment per year on your mortgage shortens the length of your loan by years.
Data Sources for stock and index quotes: Yahoo Finance, WSJ
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Last Week's Riddle and Answer
Last Week's Riddle:
Name 2 things that have only one eye but can't see?
Last Week's Answer:
A needle and a hurricane.
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