Macro Briefing: 26 August 2025

Chicago Fed National Activity Index indicates sluggish US economic activity for fourth month in July. The monthly index posted a below-trend reading last month, with three of the four broad categories reflecting negative contributions.

President Trump says he’s fired Fed Governor Lisa Cook, who responded: “I will not resign.” Trump’s claim that he removed Cook could be challenged in federal court and the Supreme Court could eventually rule on whether the firing is legal.

Sales of new US single-family homes fell in July relative to a sharp upward revision to June’s sales. “Affordability challenges and slower job growth in most industries serve as headwinds to the housing market,” said Daniel Vielhaber, an economist at Nationwide.

Texas factory activity continued to expand in August, according to the Dallas Fed’s manufacturing survey. The production index, a key measure of state manufacturing conditions, eased from July’s reading but remains well above average.

Slowing US labor market concerns some analysts. “There’s a real cooling in the labor market,” says Andy Challenger, senior vice president of executive outplacement firm Challenger, Gray & Christmas. “We’re also having lots of individual conversations with companies that are letting us know to expect future layoffs.”