Economic developments have been a focal point over the past week, heavily influencing the daily lives of Americans. Rising costs at grocery stores and gas stations are prompting households and businesses to reevaluate their spending decisions.

U.S. Economy’s Sluggish Growth

The U.S. economy grew at a modest pace of 1.5% from April to June. This growth was dampened by rising imports, although consumer spending showed an uptick. The Federal Reserve’s preferred inflation measure grew slower last month, but still exceeded the central bank’s target of 2%.

According to the Commerce Department, the gross domestic product (GDP) shows a slowdown from the 2.1% growth seen in the first quarter of 2026, falling below economists’ predictions. Yet, consumer spending climbed at a 3.2% annual rate, up from the previous quarter’s 0.5%. Business investments, excluding housing, also rose by 8.4%, though down from 10.6% earlier in the year, with significant investment in artificial intelligence.

Mortgage Rates Reach Yearly Highs

The average U.S. long-term mortgage rate climbed for the fourth consecutive week, reaching the highest point in a year. This adds pressure on homebuyers seeking relief from high borrowing costs.

The benchmark 30-year fixed rate increased to 6.66%, up from 6.58% last week, reported by Freddie Mac. One year ago, the rate stood at 6.72%. The 15-year fixed-rate mortgage also saw an increase, reaching 6.04% from 5.96%, compared to 5.85% a year ago.

Consumer Confidence Declines

Consumer confidence in the U.S. economy dropped this month due to rising gas prices and intensified geopolitical tensions. The Conference Board’s consumer confidence index fell to 90.8 in July from 92.2 in June, maintaining the same low range seen since early this year. Gas prices, which had decreased to $3.70 per gallon, rose again to $4.11 amid escalating conflicts in the Middle East.

Stock Market’s Volatile July

The U.S. stock market experienced volatility yet ended the week with gains. Amazon saw a spike, whereas Apple dipped, and escalating oil prices added inflation concerns. Brent crude prices fluctuated between $72 and $102 earlier in July, finally settling at $88.68 per barrel, raising gasoline prices to an average of $4.11 per gallon.

Federal Reserve’s Decision on Interest Rates

The Federal Reserve maintained its key interest rate at around 3.6%, although some officials favored raising rates due to persistent inflation. Remaining unchanged for five consecutive meetings, this decision did not offer much relief for consumers, as credit card rates stay near 20% and mortgage rates are at their highest since last August.

Unemployment Benefit Filings Increase

U.S. applications for unemployment benefits rose last week by 9,000, reaching 197,000, according to the Labor Department. Despite this rise, layoffs remain within historically healthy levels. With filings serving as a close indicator of labor market health, the previous week’s adjusted count was 188,000, the lowest in over 50 years.