It’s one of those weeks where the data could really shift the market’s mood. With Jackson Hole in the rearview, traders are now watching growth, inflation, and consumer health to see whether the Fed can finally move toward rate cuts — or if sticky inflation keeps the pressure on. Here’s what matters most:
GDP and Jobless Claims (Thursday, Aug 28)
The second estimate of Q2 GDP drops Thursday, and it’s not just a rerun. The first print showed 3% annualized growth, but most of that came from trade dynamics, while consumer and business spending slowed to the weakest pace in more than two years (Reuters). That nuance matters. If revisions show even softer underlying demand, the “strong economy” narrative starts to crack.
On the same morning, we get weekly jobless claims — a much fresher read on the labor market. Claims have been steady, but any jump would feed the idea that employment is cooling faster than the Fed expected. Strong GDP paired with low claims? That could push yields and the dollar higher. Weak GDP with rising claims? Think bonds rallying and a softer dollar.
Core PCE, Income, and Spending (Friday, Aug 29)
Friday is the real heavyweight: the Fed’s preferred inflation gauge, Core PCE. In June, it came in at 2.8% year-over-year, hotter than expected, with tariffs quietly lifting prices on everything from furniture to clothing (NY Post). Powell has been clear — the Fed is watching this number more than anything else.
It won’t land alone. Personal income and spending data arrive with it, giving us a snapshot of whether households are still willing (and able) to spend through higher prices. If inflation cools while spending holds up, markets will see it as the Goldilocks outcome. If inflation proves sticky, expect rate-cut hopes to fade fast and yields to jump.
Consumer Confidence (Tuesday, Aug 27)
Before those big Thursday and Friday reports, Tuesday brings a softer but still important read: the Conference Board’s consumer confidence survey. Lately, spending has been carried by wealthier households — those earning above $100,000 — who boosted July spending by 4.6%, while middle-income groups pulled back (Reuters). That dynamic raises the question: how long can the top of the income ladder carry the economy?
If confidence slips, especially among higher earners, it could hint at demand cracks ahead. Stronger sentiment, on the other hand, would support the soft-landing narrative and keep equity bulls in the game.
Bonus Watch: Tech Earnings
Outside the macro data, corporate earnings could stir up volatility. NVIDIA reports this week, and given its central role in the AI trade, traders will be watching closely. HP’s numbers will also offer insight into hardware demand and enterprise spending. A surprise either way could ripple across risk sentiment.
⚡ Bottom Line
This week is all about three things: growth, inflation, and the consumer. GDP and jobless claims will set the stage Thursday, Core PCE will likely steal the spotlight Friday, and consumer confidence will color the narrative in between.
The Fed’s next move hinges on whether inflation keeps cooling without the economy breaking down. For traders, that means staying nimble: strong data could send yields and the dollar higher, while weaker prints may reignite hopes for rate cuts and keep risk assets afloat.
Friday’s PCE is the big boss this week — everything else is warm-up.
