Monthly Market Update

Holding Pattern

• Gross Domestic Product ⁽¹⁾⁽²⁾ (2Q25): The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2025 is 3.0% on September 4, 2025, unchanged from on September 2, 2025.
• Employment (August): Total nonfarm payroll employment rose by 22,000 in August, and the unemployment rate also changed little, at 4.3%, the U.S. Bureau of Labor Statistics reported. Employment continued to trend up in health care, but was offset by losses in federal government and in mining, quarrying, and oil and gas extraction. The June payroll figure was revised downward by 27,000, from 14,000 to -13,000, and July was revised up by 6,000.
• Inflation ⁽⁴⁾ (July): The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2% on a seasonally adjusted basis in July, after rising 0.3% in June, the U.S. Bureau of Labor Statistics reported. Over the last 12 months, the all items index increased 2.7% before seasonal adjustment. The index for all items less food and energy rose 0.3% in July, after increasing 0.2% in June. The all items less food and energy index rose 3.1% for the 12 months ending in July, after rising 2.9% over the 12 months ending in June.
• The Producer Price Index (PPI) (July): The Producer Price Index for final demand, seasonally adjusted, rose 0.9% in July, after remaining unchanged in June and moving up 0.4% in May, the U.S. Bureau of Labor Statistics reported. On an unadjusted basis, the index for final demand rose 3.3% for the 12 months ended July 2025.
• Retail and Food Services Sales ⁽⁶⁾ (July): Advance estimates of U.S. retail and food services sales for July 2025, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $726.3 billion, up 0.5% (±0.5%) from the previous month, and up 3.9% (±0.5%) from July 2024.
• Personal Income and PCE ⁽⁹⁾ (July): Personal income increased $112.3 billion (0.4% at a monthly rate) in July, according to estimates released by the U.S. Bureau of Economic Analysis. From the preceding month, the PCE price index for July increased 0.2%. Excluding food and energy, the PCE price index also increased 0.3%. From the same month one year ago, the PCE price index for July increased 2.6%. Excluding food and energy, the PCE price index increased 2.9% from one year ago.

Easing in Sight

The most recent Fed meeting took place on July 30, 2025. The FOMC decided to hold federal funds to the target range of 4.25% to 4.50%. Fed Chair Powell spoke at the annual Federal Reserve Jackson Hole economic symposium on August 22^nd 2025, providing additional insight for Fed positioning prior to the next FOMC meeting. As of this writing, markets are pricing an 88.1% chance of lowering rates by -25 bps, and a 11.9% chance of a -50bps change at the September 17^th 2025 meeting. ⁽⁷⁾⁽⁸⁾

Highlights of Chair Powell’s Economic Symposium Commentaries in Jackson Hole:

• Growth and Inflation Trends: “GDP growth has cooled to 1.2% in the first half of 2025, driven by softer consumer spending. Tariffs are beginning to push prices higher, with core PCE inflation rising to 2.9% year-over-year. While some inflationary pressure may be transitory, there is uncertainty about how long these effects will persist.”
• Labor Market Dynamics: “Job growth has slowed sharply, averaging just 35,000 per month recently, down from 168,000 in 2024. This deceleration reflects both weaker demand and constrained labor supply, largely due to reduced immigration. Despite this, the unemployment rate remains low at 4.2%, and broader indicators suggest a labor market in fragile balance.”
• Balancing the Dual Mandate: “We take into account the extent of departures from our goals and the potentially different time horizons over which each is projected to return to a level consistent with our dual mandate.”

Highlights of the August 2025 Beige Book:

• Mixed Growth and Consumer Strain: “Most of the twelve Federal Reserve Districts reported little or no change in economic activity… consumers were being squeezed by rising costs of insurance, utilities, and other expenses.”
• Hiring Hesitation and Labor Shortages: “Seven Districts noted that firms were hesitant to hire workers because of weaker demand or uncertainty… contacts reported a reduction in the availability of immigrant labor.”
• Tariff Driven Cost Pressures and Limited Pricing Power: “Nearly all Districts noted tariff-related price increases… some firms described at least some hesitancy in raising prices, citing customer price sensitivity, lack of pricing power, and fear of losing business.”

Monthly and YTD returns

Source: Morningstar asset class screening total return 1 month USD and total return YTD as of August 31^st 2025 ⁽¹¹⁾

• This content is being published by Amerant Investments, Inc (Amerant Investments) a dually registered broker-dealer and investment adviser registered with the Securities and Exchange Commission and member of FINRA/SIPC. Registration does not imply a certain level of skill, endorsement, or approval. Amerant Investments is an affiliate of Amerant BankDefinitions:
  • ⁽¹⁾ Gross Domestic Product (GDP): A comprehensive measure of U.S. economic activity. GDP is the value of the goods and services produced in the United States. The growth rate of GDP is the most popular indicator of the nation’s overall economic health. Source: Bureau of Economic Analysis (BEA).
  • ⁽²⁾ GDPNow is not an official forecast of the Atlanta Fed. Rather, it is best viewed as a running estimate of real GDP growth based on available economic data for the current measured quarter. There are no subjective adjustments made to GDPNow—the estimate is based solely on the mathematical results of the model. In particular, it does not capture the impact of COVID-19 and social mobility beyond their impact on GDP source data and relevant economic reports that have already been released. It does not anticipate their impact on forthcoming economic reports beyond the standard internal dynamics of the model.
  • ⁽³⁾ The Current Employment Statistics (CES) program produces detailed industry estimates of nonfarm employment, hours, and earningsof workers on payrolls. CES National Estimates produces data for the nation, and CES State and Metro Area produces estimates for all 50 States, the District of Columbia, Puerto Rico, the Virgin Islands, and about 450 metropolitan areas and divisions. Each month, CES surveys approximately 142,000 businesses and government agencies, representing approximately 689,000 individual worksites. Source: Bureau of Labor Statistics (BLS).
  • Initial Claims: An initial claim is a claim filed by an unemployed individual after a separation from an employer. The claimant requests a determination of basic eligibility for the UI program. When an initial claim is filed with a state, certain programmatic activities take place and these result in activity counts including the count of initial claims. The count of U.S. initial claims for unemployment insurance is a leading economic indicator because it is an indication of emerging labor market conditions in the country. However, these are weekly administrative data which are difficult to seasonally adjust, making the series subject to some volatility. Source: US Department of Labor (DOL).
  • ⁽⁴⁾ The Consumer Price Index (CPI):Is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. Indexes are available for the U.S. and various geographic areas. Average price data for select utility, automotive fuel, and food items are also available. Source: Bureau of Labor Statistics (BLS).
  • ⁽⁵⁾ The national unemployment rate: Perhaps the most widely known labor market indicator, this statistic reflects the number of unemployed people as a %age of the labor force. Source: Bureau of Labor Statistics (BLS).
  • The number of people in the labor force. This measure is the sum of the employed and the unemployed. In other words, the labor force level is the number of people who are either working or actively seeking work. Source: Bureau of Labor Statistics (BLS).
  • ⁽⁶⁾ Advance Monthly Sales for Retail and Food Services:Estimated monthly sales for retail and food services, adjusted and unadjusted for seasonal variations. Source: United States Census Bureau.
  • ⁽⁷⁾ Federal Open Market Committee (FOMC): Responsible for implementing Open market Operations (OMOs)–the purchase and sale of securities in the open market by a central bank—which are a key tool used by the US Federal Reserve in the implementation of monetary policy. Source: Federal Reserve.
  • ⁽⁸⁾ The Federal Funds Rate: Is the interest rate at which depository institutions trade federal funds (balances held at Federal Reserve Banks) with each other overnight. When a depository institution has surplus balances in its reserve account, it lends to other banks in need of larger balances. In simpler terms, a bank with excess cash, which is often referred to as liquidity, will lend to another bank that needs to quickly raise liquidity. Source: Federal Reserve Bank of St. Louis.
  • ⁽⁹⁾ The “core” PCE price index: Is defined as personal consumption expenditures (PCE) prices excluding food and energy prices. The core PCE price index measures the prices paid by consumers for goods and services without the volatility caused by movements in food and energy prices to reveal underlying inflation trends. Source: Bureau of Economic Analysis (BEA).

  Sources: U.S. Bureau of Economic Analysis (BEA), Bureau of Labor Statistics (BLS), U.S. Department of Labor (DOL), Federal Reserve, Federal Reserve Economic Database (FRED), Federal Reserve Bank of Atlanta, U.S. Census Bureau, Department of Housing and Human Development (HUD), U.S. Department of Agriculture, U.S. Energy Information Administration (EIA), U..S Department of the Treasury, Office of the United States Trade Representative (USTR), U.S. Department of Commerce, data.gov, investor.gov, usa.gov, congress.gov, whitehouse.gov, U.S. Securities and Exchange Commission (SEC), Morningstar, The International Monetary Funds (IMF), The World Bank (WB), European Central bank (ECB), Bank of Japan (BOJ), European Parliament, Eurostats, Organization for Economic Co-operation and Development (OECD), National Bureau of Statistics of the People’s Republic of China, Organization of the Petroleum Exporting Countries (OPEC), World health organization (WHO). The White House, Tariff FactSheet.

  ⁽¹¹⁾ Financial Markets – Monthly and YTD returns (Table): Asset class performance is in USD and refers to the following indices: Equities: US Large Caps (S&P 500), Emerging Markets (MSCI EM), Europe (MSCI Europe), Japan (MSCI Japan). Fixed Income: 10-Yr. US Treasuries (BofAML US Treasury Current 10-Yr.), Emerging Markets Sovereign (USD) (JPM EMBI Global), US High Yield (BofAML US HY Master II), US Investment Grade (BarCap US Aggregate Bond), and Developed Markets Sovereign (excl. US) (JPM GBI Global Ex US). Source: Morningstar.

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