U.S. Inflation Softens as Mortgage Demand Jumps

Fresh U.S. data released on September 10 showed producer price pressures easing and mortgage demand rebounding, offering relief on the inflation front even as the labor market remains weak.

Producer prices fell 0.1 percent month-on-month in August, defying forecasts for a 0.3 percent rise and reversing July’s sharp 0.7 percent gain.

On a yearly basis, the Producer Price Index slowed to 2.6 percent from 3.1 percent. Core PPI, which excludes volatile categories, also slipped, easing to 2.8 percent year-on-year from 3.4 percent.

The figures suggest cost pressures are cooling across the supply chain, strengthening the case for the Federal Reserve to begin cutting rates later this month.

The housing sector showed unexpected strength. The Mortgage Bankers Association reported applications jumped 9.2 percent in the latest week as the 30-year mortgage rate fell to 6.49 percent from 6.64 percent.

The purchase index rose to 169.1 from 158.7, while refinancing activity surged more than 12 percent. The rebound points to resilient consumer demand, despite high borrowing costs.

U.S. Growth Holds on Tech Investment as Jobs Lag Behind

These developments come against the backdrop of last week’s sobering labor data. On September 5, the Labor Department reported only 22,000 new jobs in August, the weakest monthly gain since 2010, while unemployment climbed to 4.3 percent.

Corporate investment, however, remains robust, with second-quarter GDP growing 3.3 percent on the back of a 5.7 percent surge in spending, largely on AI, robotics, and automation.

On September 9, the NFIB Small Business Optimism Index rose to 100.8 and retail sales were solid, but payroll benchmarks were revised downward by more than 900,000, underlining structural weakness in hiring.

Analysts note firms are prioritizing productivity gains through technology rather than expanding headcount. Together, the data show an economy in transition: inflation is easing, housing is holding up, and growth is supported by investment, but the labor market is being reshaped by automation, leaving workers behind.