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This past week featured the release of several reports that provided important clues about where the economy may be headed. On Tuesday, monthly retail sales figures were released. On a monthly basis, retail sales increased by .7 percent, which was much higher than the .4 percent increase predicted by analysts. It was also more than double the .3 percent increase seen in July.

Core retail sales were up 1 percent on a monthly basis, which was higher than the predicted .4 percent increase and roughly 500 percent higher than the .2 percent increase seen in July. it is worth noting that retail sales figures for July were revised downward after their initial release. Therefore, it’s possible that the acceleration in consumer spending is nothing more than a problem with the data itself.

Also on Tuesday, the Empire State Manufacturing Index came in at -19 percent, which means that there was a significant slowdown in this sector over the previous month. This likely adds further proof to the narrative that inflation is largely being fueled by spending on services as opposed to durable goods. Analysts had expected the index to come in at -.9 percent for the month.

On Wednesday, building permit data for July was released, and it found that there were 1.44 million permits, which was the same as June. However, it was believed prior to Wednesday that there were 1.47 million permits issued. Housing starts increased from 1.40 million to 1.45 million, which may be good news for a market that has been haunted by a lack of inventory for several years now.

Of course, the main event on Wednesday was the release of the FOMC minutes from the July meeting. It was revealed that some members of the FOMC were against raising rates in July. It was also revealed that many in the group also feel as if inflationary pressures are still too great and that further rate hikes might be necessary.

It was assumed after the release of CPI and PPI data last week that the Fed was done with its hiking cycle. While this may still be true, it’s less likely that investors can count on a dovish Fed coming to their rescue anytime soon. The FOMC will meet again in September to determine whether to increase the Fed Funds Rate from its current level of 5.25 to 5.50 percent.

Thursday saw the release of unemployment claims data, and it was revealed that 239,000 people had filed for unemployment benefits over the past week. This was slightly below the 240,000 claims predicted by analysts and was also lower than the 250,000 claims filed a week ago.

In addition, the Philly Fed Manufacturing Index was released and came in at 12 percent. It was expected to come in at -9.8 percent and was at -13 percent last month. It’s not clear what led to the sudden rise and why it seems to be at odds with the data released from New York just two days prior.

For the week, the S&P 500 lost 91.34 points to finish at 4,369, which is 2 percent lower than its Monday open. The market hit a high of 4,489 on Monday afternoon before spending the rest of the week losing ground. It would hit a low of 4,350 on Friday morning before moving toward its closing price on Friday afternoon.

The Nasdaq also lost about 2 percent this week closing at 13,290. Like the S&P 500, the Nasdaq would also hit its high of 13,747 on Monday afternoon before spending most of the week in freefall. It would hit its low of the week of 13,176 on Friday morning.

Finally, the Dow would also lose about 2 percent this week closing at 34,500 on Friday afternoon. As with the other two major indices, the Dow hit its high of 35,267 on Monday and would fall throughout the rest of the week to its low of 34,392 on Friday morning.

Next week will likely see several developments as Federal Reserve Chair Jay Powell is expected to speak on Friday. Manufacturing and services PMI data will also be coming out this week along with unemployment claims and housing market data.

The first full week of August started off slow but finished with a bang as Consumer Price Index (CPI) and Price Producer Index (PPI) figures were released on Thursday and Friday. The University of Michigan also released its consumer sentiment and inflation expectation figures for the previous month on Friday morning.

As expected, CPI increased on an annual basis to 3.2 percent in July, which was slightly lower than the 3.3 percent forecast by economic experts prior to the release. On a monthly basis, both CPI and Core CPI figures increased by .2 percent, in line with expectations. It was reported that higher gas and housing prices were largely responsible for the uptick in inflation the previous month. In July, it was revealed that inflation had increased by 3 percent on an annualized basis during the month of June.

During the month of July, Core PPI increased by .3 percent while the overall cost of goods also rose by .3 percent. This was higher than the expected increase of .2 percent for both core and overall prices. An increase in the cost of services was cited as the reason for the higher numbers.

The University of Michigan Consumer Sentiment Index fell in July to 71.2 from 71.6 in June. However, it was also revealed that consumers expected the inflation rate this time next year to be 3.3 percent compared to 3.4 percent a month ago. There has been anecdotal evidence in recent weeks that consumers have been changing their spending habits in response to increasing prices and a possible recession.

These figures seem to indicate that consumers may be taking a more cautious approach about the future. According to a poll from IBD/TIPP, less than one out of every five respondents said that their wages were keeping up with inflation.

It’s also worth noting that members of the Federal Reserve are also unsure if a recession can be avoided. Mary Daly, a member of the Federal Reserve, said on Thursday that although inflation figures are going in the right direction, core inflation is still too high. Other members of the Fed have also said that core inflation is too high and that future interest rate decisions will be made based on the data moving forward.

The Federal Open Market Committee (FOMC) will hold its next meeting in September, and there is a clear split between those within the Fed who feel that another rate hike is coming and investors who feel that the Fed will hold the line. Currently, the Fed Funds Rate is between 5.25 percent and 5.5 percent, which is the highest since 2007.

The Dow 30 was held within a relatively tight range this week as it meandered between a low of 35,053 and a high of 35,550. It would hit the low on Tuesday, reach the high on Thursday and then spend most of Friday doing little of note. Ultimately, the Dow would close down .15 percent for the week, which was a loss of 53 points from Monday’s open.

Unlike the Dow, the Nasdaq moved quite a bit this week as it gave up nearly 350 points to close at 13,644. That was a loss of about 2.5 percent over the last five trading days. On Monday, the market opened at its weekly high of 13,987 before moving almost straight down on Tuesday, Wednesday and Thursday. On Friday, the Nasdaq reached its low of the week at 13,614 before easing back up to its final closing price.

Finally, the S&P 500 would open the week at 4,498, reach its high on Wednesday at 4,523 and would hit its low of 4,448 on Friday morning. The index would finish the week at 4,464, which was a loss of .83 percent over the last five trading days.

Next week, retail sales data is set to be released on Tuesday while FOMC meeting minutes from July’s gathering will be made public on Wednesday. On Thursday, unemployment claims data for the week will be revealed. Manufacturing data from New York and Philadelphia will also be made public this coming week.