With the end of summer drawing near, it has been a busy couple of weeks. We had the Fed’s annual conference in Jackson Hole and a whole bunch of economic data, including a new inflation release and the jobs report this morning. When we last talked, the markets were selling off. So, let’s look at where we are now and what mattered in the past couple of weeks.

My colleague Sam Millette, director, fixed income on Commonwealth’s Investment Management and Research team, helped me put together this month’s Market Risk Update. Thanks for the assist, Sam! Let’s take a closer look.

This has been a busy week, with a number of developments that, at first glance, seem concerning. But how worried should we be? Let's get right to what mattered.

My colleague Sam Millette, director, fixed income on Commonwealth’s Investment Management and Research team, helped me put together this month’s Economic Risk Factor Update. Thanks for the assist, Sam! Let’s take a closer look.

Once again, this week was all about inflation—and the data was more mixed this time. Most of the news was good, as core inflation continued to tick down, while the monthly figures were in line with expectations. But the year-on-year headline number rose for the first time in months. It didn’t rise by a lot, only 0.2 percent. Still, that wasn’t a drop. It also raises the possibility that inflation could be bouncing back. Spoiler alert: I don’t think so.

This morning’s inflation data came in pretty much in line with expectations. Headline inflation was up 0.2 percent for the month and 3.2 percent for the year. Core inflation (excluding energy and food) was up 0.2 percent for the month and 4.7 percent for the year. So far, so good. At 0.2 percent per month, that would mean an annual inflation rate of between 2 percent and 3 percent. Pretty good, yes?

July was another good month for stocks across the board. The U.S. indices were up in the low single digits, while international markets also did well. Riskier investments like the Nasdaq and emerging markets did best. Fixed income, on the other hand, was much weaker for the month as interest rates rose and the Fed hiked base rates. Financial markets were clearly in a risk-on mode and benefited from riskier investments like tech stocks at the expense of more boring ones.

There was really only one thing that mattered this week: the economy kept growing. I should probably also mention, of course, that the market took a hit. But, as we will see, that likely doesn’t matter. Let’s get into it.

U.S. indices were up by low single digits in July, with the Nasdaq doing best as tech stocks continued to rally. International markets also did well, but fixed income was weaker. This market performance reflected the underlying economy. Strong job creation pushed consumer confidence up significantly, supporting income and spending growth. Inflation continued its decline, although the Fed raised rates again as expected.

There was a lot more data this week than last—and all of it was good. Everything we are seeing suggests that the economy is still growing, despite the headlines and fears. While there are certainly risks out there, the data is showing a resilience that no one expected, and that is a good sign for the future.