Morning Business Report: Inflation steady in July, stocks soar, thrifting up, Social Security COLA rising

Inflation remained steady in July, easing concerns that recent tariffs would drive prices higher.

(LILAMAX)- Inflation remained steady in July, easing concerns that recent tariffs would drive prices higher. While Americans paid more for auto repairs, healthcare, and housing, costs for food, energy, and smartphones held stable. Economists say controlled inflation increases the likelihood of a Federal Reserve interest rate cut in September.

The market responded positively to the report. The S&P 500 and Nasdaq closed at record highs, while the Dow jumped 483 points. The Russell 2000, which tracks 3,000 smaller companies sensitive to interest rates, rose nearly 3 percent.

Shares of discount airlines soared after Spirit Airlines warned it may struggle to stay in business due to higher prices for premium seats. Rival budget carriers saw the biggest gains, with Frontier Airlines climbing 24 percent.

A recent poll found Americans’ discretionary spending has dropped 42 percent over the past year. More than half of those surveyed are concerned about their finances, and two-thirds are turning to thrift shopping to stretch their budgets. About one in four thrift shoppers now prefer shopping online.

In other economic news, new estimates suggest a 2.7% Social Security cost-of-living adjustment for 2026, following a 2.5% increase in 2025. The final adjustment will be announced in October.