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The Bureau of Labor Statistics (BLS) released its Quarterly Census of Employment and Wages (QCEW), revealing that job growth for the 12 months through March 2025 was overestimated by 911,000 jobs. That’s an average overstatement of 76,000 jobs per month – meaning more than half of the reported gains never actually occurred.

This marks the largest downward revision on record and suggests the labor market has been significantly weaker than previously believed.

What’s the bottom line? These revisions add to mounting evidence that the job market is losing momentum. Recent job reports from both the BLS and ADP have come in below expectations, unemployment claims remain elevated, and job openings continue to decline. On top of that, consumer confidence in the labor market is slipping, with fewer people believing they could easily find a new job, according to the latest New York Fed Consumer Expectations Survey.

Initial jobless claims rose by 27,000 to 263,000 – the highest since 2021 and above expectations. Continuing claims, which track people still receiving unemployment benefits after the first week, held steady at 1.939 million.

What’s the bottom line? The sharp rise in new claims, along with continuing claims staying above 1.9 million for 16 straight weeks, reinforces signs that the labor market is softening.

Inflation edged higher last month, with the Consumer Price Index (CPI) rising 0.4% in August. While slightly above the monthly forecast, annual inflation came in at 2.9% – right in line with expectations. The uptick in headline inflation was mainly driven by higher energy costs, especially gasoline prices which rose nearly 2%.

Core inflation, which excludes food and energy, increased 0.3% for the month and held steady at 3.1% year-over-year – both broadly matching analyst projections.

Shelter remains the largest contributor to inflation, while other notable drivers in August included airline fares and used vehicles.

What’s the bottom line? With inflation largely meeting expectations and the job market showing clear signs of cooling, the Fed appears likely to pivot its focus from inflation control to supporting employment. Markets are now fully pricing in a rate cut at the Fed’s next meeting on September 17.

Quick reminder: When the Fed adjusts interest rates, it’s specifically targeting the Fed Funds Rate – the short-term rate banks use to lend to each other. While this influences broader borrowing costs, it doesn’t directly set mortgage or long-term interest rates.

Wholesale inflation dipped 0.1% in August, reversing a spike in July, according to the latest Producer Price Index (PPI) report. Producer prices rose 2.6% over the past year, a slowdown from 3.1% the month before. Core prices, which exclude the more volatile food and energy categories, also declined 0.1% in August, bringing the annual core rate down to 2.8%.

All figures came in below expectations, with July’s numbers also revised downward.

What’s the bottom line? Wholesale prices influence the Fed’s preferred inflation gauge, the Personal Consumption Expenditures (PCE) index. While a few shared components like airline fares and portfolio management saw price increases, others – particularly in healthcare – remained more muted. Overall, this data shouldn’t spark a sharp rise in the next PCE report, which will be released on September 26.

Annual home price growth eased in July, with Cotality reporting a 1.4% year-over-year increase – down from 1.7% in June. ICE Mortgage Monitor showed similar results, with national home values rising 1.1% year-over-year, unchanged from the previous month and ending a seven-month streak of slowing gains.

What’s the bottom line? Despite the slowdown, expert sentiment remains upbeat. Cotality projects a small 0.2% increase for August and expects prices to rise nearly 4% over the next year. That outlook likely reflects expectations of lower interest rates, which could boost buyer demand and support future appreciation.

This reinforces why real estate continues to be a powerful wealth-building tool. For example, a $500,000 home appreciating at 4% annually would gain $20,000 in value in just one year.

The Federal Reserve kicks off its two-day policy meeting on Tuesday, with a decision on interest rates and a press conference slated for Wednesday afternoon. As mentioned earlier, markets widely anticipate a cut to the benchmark Fed Funds Rate.

On the housing front, we’ll get a look at this month’s homebuilder confidence on Tuesday, followed by August’s new construction data on Wednesday. Also worth watching: August’s Retail Sales figures, due Tuesday, and the latest Jobless Claims report, arriving Thursday.

Mortgage Bonds ended last week trading sideways near support at 101.06. The 10-year Treasury yield closed near the middle of a wide range, with support at the key psychological level of 4% and resistance at 4.126%.