NEW YORK (AP) — Shoppers spent at a healthy pace in July, particularly at the nation’s auto dealerships, as they appear to shrug off President Donald Trump's tariffs, which are starting to take a toll on jobs and lead to some price increases. Retail sales rose a solid 0.5% last month, and June spending was stronger than expected, according to the Commerce Department's report released Friday. June's retail sales were revised upward to 0.9%, from a 0.6% increase, the agency said. The pace in July matched economists' estimates. The increases followed two consecutive months of spending declines — a 0.1% pullback in April and a 0.9% slowdown in May. Excluding auto sales, which have been volatile since Trump imposed tariffs on many foreign-made cares, retail sales rose 0.3% in July. Auto sales rose 1.6%. They appear to have returned roughly to normalized spending after a surge in March and April as Americans attempted to get ahead of Trump’s 25% duty on imported cars and parts and then a slump after that, according to Samuel Tombs, chief U.S. Economist at Pantheon Macroeconomics. The data showed solid spending across many retail sectors. Business at clothing stores was up 0.7% while online retailers saw a 0.8% increase. Business at home furnishings and furniture stores rose 1.4%. However, at electronics stores, sales were down 0.6%. And business at restaurants, the lone services component within the Census Bureau report and a barometer of discretionary spending, fell 0.4%, however as shoppers are focusing on eating at home to save money. A category of sales that excludes volatile sectors such as gas, cars, and restaurants rose last month by 0.5% from the previous month. The figure feeds into the Bureau of Economic Analysis’s consumption estimate and is sign that consumers are still spending on some discretionary items July's spending likely got a boost from Amazon’s Prime Day sales and competing online sales at Target, Walmart and other retailers, analysts said. “Consumers have a little more spring in their step,” said Christopher S. Rupkey, chief economist at FWDBonds LLC, a financial markets research firm. “Whether this is simply whistling in the dark, time will tell, but the tariff headline chaos did not keep consumers at home in July with the one caveat that they reduced their dining out spending. Retail sales do not give the economy a complete bill of health, but at least the consumer is not in headlong retreat.” But Rupkey noted that time will tell how consumers will react when they see higher prices on goods in shops in the mall in the months to come. Tariffs are starting to take a toll in other parts of the economy. Earlier this month, the Labor Department reported that U.S. hiring is slowing sharply as Trump’s trade policies paralyze businesses and raise concerns about the outlook for the world’s largest economy. U.S. employers added just 73,000 jobs last month, the Labor Department reported, well short of the 115,000 expected. Another government report, issued Tuesday, on U.S. inflation showed that inflation was unchanged in July as rising prices for some imported goods were offset by declining gas and grocery prices, leaving overall prices modestly higher than a year ago. Consumer prices rose 2.7% in July from a year earlier, the same as the previous month and up from a post-pandemic low of 2.3% in April. Excluding the volatile food and energy categories, core prices rose 3.1%, up from 2.9% in June. Both figures are above the Federal Reserve’s 2% target. On a monthly basis, prices rose 0.2% in July, down from 0.3% the previous month, while core prices ticked up 0.3%, a bit faster than the 0.2% in June. The new numbers suggest that slowing rent increases and cheaper gas are offsetting some impacts of Trump’s sweeping tariffs. Many businesses are also likely still absorbing much of the cost of the duties. The consumer price figures likely reflect some impact from the 10% universal tariff Trump imposed in April, as well as higher duties on countries such as China and Canada. But that may change. U.S. wholesale inflation soared unexpectedly last month, signaling that Trump’s taxes are pushing costs up and that higher prices for consumers may be on the way. The Labor Department reported Thursday that its producer price index — which measures inflation before it hits consumers— rose 0.9% last month from June, biggest jump in more than three years. Compared with a year earlier, wholesale prices rose 3.3%. The figures were much higher than economists had expected. The report comes as major retailers like Walmart and Target are slated to report their fiscal second-quarter earnings reports starting next week. Analysts will stud the reports to see how much retailers are absorbing the costs and how much they're passing on to shoppers. They’ll also want to get insight into the state of consumer behavior heading into the critical fall and winter holiday seasons. In May, Walmart, the nation’s largest retailer, warned t hat it had increased prices on bananas imported from Costa Rica from 50 cents per pound to 54 cents, but it noted that a large sting for shoppers wouldn't start to appear until June and July. The retailer’s chief financial officer, John David Rainey, told The Associated Press that he thought car seats made in China that were selling for $350 at Walmart would likely cost customers another $100. But a growing list of companies including Procter & Gamble, e.lf. Cosmetics, Black & Decker and Ralph Lauren told investors in recent weeks that they plan to or have already raised prices. Some, like eyewear retailer Warby Parker, are trying to be selective and are trying to focus on raising prices on just their premium products as a way to offset the higher costs from tariffs. Warby Parker told analysts last Thursday that it plans to keep its $95 option. But it’s increasing prices on select lens types. It also wants to cater more to older shoppers who need more expensive progressive lens. Warby Parker said that progressives, trifocals and bifocals make up roughly 40% of all prescription units sold industrywide. But just 23% of Warby Parker’s business now is made up of progressives. Company executives said progressives are its highest priced offering and offer the highest profit margins. “We were able to quickly roll out select strategic price increases that have benefited our growth,” Neil Blumenthal, co-chairman and co-founder and co-CEO of Warby Parker, told analysts last week.

BANGKOK (AP) — China's economy showed signs of slowing in July as factory output and retail sales slowed and housing prices dropped further, according to data released Friday. Uncertainty over tariffs on exports to the United States is still looming over the world's second-largest economy after President Donald Trump extended a pause in sharp hikes in import duties for 90 days, beginning Monday, following a 90-day pause that began in May. As officials worked toward a broader trade agreement, China reported earlier that its exports surged 7.2% in July year-on-year, while its imports grew at the fastest pace in a year, as businesses rushed to take advantage of the truce in Trump's trade war with Beijing. But that also reflected a lower base for comparison, and manufacturers have slowed investments, hiring and production as they watch to see what comes. Chinese manufacturers also have ramped up shipments to Southeast Asia, Africa and other regions to help offset lost business in the U.S. Still, annual growth in industrial output fell to 5.7% in July from 6.8% in June, the National Bureau of Statistics said. Investments in factory equipment and other fixed assets rose a meager 1.6% in January-July, compared with 2.8% growth in the first half of the year. Property investments plunged 12% in the first seven months of the year, with residential housing investment dropping nearly 11%. Prices for newly built housing in major cities fell 1.1%, as a prolonged downturn in the property industry lingered. The meltdown in the housing market hit just as the COVID -19 pandemic began, sapping one of the economy's main drivers of growth and causing dozens of developers to default on their debts. The crisis rippled throughout the economy, destroying jobs for millions of people. The government has sought to ensure that most housing that was paid for gets built, but sales remain weak despite a series of moves meant to entice families into back into the market. Since most Chinese families have their wealth tied up in property, the anemic housing market has been a major factor crimping consumer spending. In July, retail sales rose 3.7%, the slowest rate in seven months and down from a 4.8% increase in June. The unemployment rate rose to 5.2% from 5% as university graduates began looking for work. While consumer prices rose 0.4% in July from the month before, prices at the wholesale level slipped 3.6% from a year earlier in another indicator of relatively weak demand.

WASHINGTON (AP) — One major question will be front and center for Federal Reserve policymakers as they prepare for an annual conference in Jackson, Wyoming next week and a crucial policy meeting in September: Which is a bigger problem for the economy right now, stubborn inflation or slower hiring? Weak job gains since April have pushed some officials toward supporting a cut in the Fed’s key rate as soon as next month, but speeches and comments by other Fed policymakers show that inflation is still a concern. That could make the Fed's ultimate move at its September 16-17 meeting a close call. There will be another jobs report and another inflation report before then, and both will likely heavily influence the decision of whether to cut or not. The uncertainty also means that Fed Chair Jerome Powell's speech next Friday in Jackson will be closely watched for any clues about next steps. If Fed officials worry more that unemployment will start to rise and the economy falter, they are more likely to reduce their rate in order lower borrowing costs and spur borrowing and spending. Yet if their concerns grow that inflation will stay high or worsen as tariffs ripple across global supply chains, they will lean more towards keeping borrowing costs high to cool the economy and lower prices. The rate currently stands at 4.3%. Wall Street investors are pretty certain — for now — that the central bank will reduce rates in September, with futures prices putting the odds of a cut at 93%, according to CME Fedwatch. Those odds jumped after the monthly jobs report Aug. 1 showed that hiring was sluggish in July and was much lower than previously estimated in May and June. Average job gains over those three months fell to just 35,000, down from 123,000 a year ago. And Tuesday's inflation report, which showed only a mild pickup in inflation at the consumer level and limited signs that tariffs were pushing goods prices higher, underscored the view of some officials that they could put inflation concerns aside and focus on shoring up the job market instead. “With underlying inflation on a sustained trajectory toward 2%, softness in aggregate demand, and signs of fragility in the labor market, I think that we should focus on risks to our employment mandate,” Michelle Bowman, a member of the Fed's governing board, said last week. Yet Austan Goolsbee, president of the Federal Reserve's Chicago branch, downplayed the weakness in hiring in remarks to reporters Wednesday. The slowdown in job gains could partly reflect the drop in immigration stemming from President Donald Trump's border crackdown, Goolsbee said, rather than a weaker economy. He also pointed to the still-low unemployment rate of 4.2% as evidence that the job market is solid. This week's inflation report included some warning signs, Goolsbee added: Prices of many services that aren't affected by tariffs, such as dental care and air fares, jumped, a sign that inflation may not be in check. “That was the most concerning thing in the inflation report, and if that persisted, we would have a hard time getting back to 2%,” Goolsbee said, referring to the central bank's inflation goal. "I am still hopeful that will not be a lasting problem.” Fed officials also disagree on how tariffs will affect inflation going forward. Many increasingly believe the duties will result in simply a one-time boost to prices that will quickly fade and not lead to ongoing inflation. “Tariffs will boost inflation in the near term, but likely not in a persistent way” that would require the Fed to keep rates elevated, Mary Daly, president of the Fed's San Francisco branch, said in a recent speech. Daly also said the labor market has “softened" and suggested the Fed “will likely need to adjust policy in the coming months.” However, Raphael Bostic, president of the Fed's Atlanta branch, said Wednesday that the tariffs could lead to longer-term inflation if they cause more manufacturers to shift output from lower-cost locations overseas back to the United States, or to other countries with higher wages. Such a change would be more than just a one-time shift. “You’re going to see fundamental structural changes if this is successful," Bostic said in remarks in Red Bay, Alabama. “It is actually a different economy.” In that scenario, Bostic said, he would prefer to wait “until we have a little more clarity." And he added that with unemployment low, “we have the luxury to do that.” Thursday's July wholesale price report, which showed a sharp jump in goods and services prices before they reach the consumer, did make one move less likely: A half-point cut in September, as suggested by Treasury Secretary Scott Bessent. Alberto Musalem, president of the Fed's St. Louis branch, who votes on Fed policy this year, said that a reduction of that size is “unsupported by the current state of the economy, and the outlook for the economy," in an interview on CNBC. Tim Duy, an economist at SGH Macro, said Thursday that the Fed may have to raise its inflation forecast at its September meeting when it provides its latest set of quarterly economic projections. The central bank's policymakers currently expect inflation, excluding volatile food and energy, to reach 3.1% by the end of this year, yet inflation is already near that level. Cutting rates at the September meeting would be hard for the Fed if it is also forecasting higher inflation, Duy said. “There are things that could happen that would push the Fed off the path" toward a rate cut, he said. “We’re not paying adequate attention to those risks.”

MCLEAN, Va. (AP) — The average rate on a 30-year U.S. mortgage fell this week to its lowest level in nearly 10 months, giving prospective homebuyers a sorely needed boost in purchasing power that could help inject life into a stagnant housing market. The long-term rate fell to 6.58% from 6.63% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.49%. Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also fell. The average rate dropped to 5.71% from 5.75% last week. A year ago, it was 5.66%, Freddie Mac said. Elevated mortgage rates have helped keep the U.S. housing market in a sales slump since early 2022, when rates started to climb from the rock-bottom lows they reached during the pandemic. Home sales sank last year to their lowest level in nearly 30 years. This is the fourth week in a row that rates have come down. The latest average rate on a 30-year mortgage is now at its lowest level since Oct. 24, when it averaged 6.54%. Mortgage rates are influenced by several factors, from the Federal Reserve’s interest rate policy decisions to bond market investors’ expectations for the economy and inflation. The main barometer is the 10-year Treasury yield, which lenders use as a guide to pricing home loans. The yield was at 4.29% at midday Thursday, up slightly from 4.24% late Wednesday. The yield has come down the last couple of weeks after weaker-than-expected July U.S. job market data fueled speculation that the Fed will cut its main short-term interest rate next month. A Fed rate cut could give the job market and overall economy a boost, but it could also fuel inflation just as President Trump’s tariff policies risk raising prices for U.S. consumers. Higher inflation could push bond yields higher, driving mortgage rates upward in turn, even if the Fed cuts its key rate. Economists generally expect the average rate on a 30-year mortgage to remain above 6% this year. Recent forecasts by Realtor.com and Fannie Mae project the average rate will ease to around 6.4% by the end of this year. “Homebuyers who have been relegated to the sidelines by high financing costs got some encouragement in the past two weeks, but it remains to be seen if it’s enough to get more of them back in the game,” said Joel Berner, senior economist at Realtor.com. Mortgage applications jumped 10.9% last week from the previous week as rates eased, according to the Mortgage Bankers Association. But much of the increase was due to homeowners applying for loans to refinance their mortgage. Such loan applications made up nearly 47% of all applications and led to a 23% surge in overall in refi applications compared to a week earlier -- the strongest week for refinance applications since April. Meanwhile, applications for adjustable-rate mortgages, or ARMs, soared 25% to their highest level since 2022, MBA said.

LONDON (AP) — Britain's economy slowed down during the second quarter of the year in the face of higher taxes on businesses and global tariff uncertainties, but growth came in higher than anticipated, official figures showed Thursday. The Office for National Statistics said output expanded by 0.3% during the second quarter from the previous three-month period, largely as a result of a strong performance in June. Though that was lower than the 0.7% increase in the first quarter of the year, it was ahead of market expectations of only a 0.1% rise. The bigger than expected increase will be welcome news to the Labour government, which has made improving growth its number one priority since it returned to power in July 2024. Higher growth will also bolster public finances as it leads to higher tax revenues. If growth continues to beat expectations in coming months, Treasury chief Rachel Reeves will be under less pressure to deliver another big tax-raising budget this fall. Reeves said Thursday's figures were “positive” but added that there is “more to do” to drive growth in the economy. The British economy, the sixth-largest in the world, has underperformed its long-run average since the global financial crisis of 2008-9. Critics say Reeves is partly responsible for much of the gloomy economic news since Labour returned to power after 14 years, because she was overly downbeat when taking on her role and has increased taxes, particularly on businesses.

SAO PAULO (AP) — The Brazilian government on Wednesday unveiled a plan to support local exporters affected by a 50% tariff imposed by U.S. President Donald Trump on several products from the South American nation. Dubbed “Sovereign Brazil," the plan provides for a credit lifeline of 30 billion reais ($5.5 billion), among other measures. Brazil's President Luiz Inácio Lula da Silva described the plan, which includes a bill to be sent to Congress, as a first step to help local exporters. Congressional leaders attended Wednesday's ceremony, a first in months, in a sign of growing political support for the leftist leader in response to Trump’s tariffs. Other measures announced by the Brazilian government include postponing tax charges for companies affected by U.S. tariffs, providing 5 billion reais ($930,000) in tax credits to small and medium-sized companies until the end of 2026 and expanding access to insurance against cancelled orders. The plan also incentivizes public purchases of items that could not be exported to the U.S. “We cannot be scared, nervous and anxious when there is a crisis. A crisis is for us to create new things,” Lula said. “In this case, what is unpleasant is that the reasons given to impose sanctions against Brazil do not exist.” Trump has directly tied the 50% tariff on many imported Brazilian goods to the judicial situation of his embattled ally, former President Jair Bolsonaro, who is currently under house arrest. ___ Follow AP’s coverage of Latin America and the Caribbean at https://apnews.com/hub/latin-america

HANOI, Vietnam (AP) — Beneath red banners and a gold bust of revolutionary leader Ho Chi Minh in Hanoi's central party school, Communist Party chief To Lam declared the arrival of “a new era of development” late last year. The speech was more than symbolic— it signaled the launch of what could be Vietnam’s most ambitious economic overhaul in decades. Vietnam aims to get rich by 2045 and become Asia’s next “tiger economy” — a term used to describe the earlier ascent of countries like South Korea and Taiwan. The challenge ahead is steep: Reconciling growth with overdue reforms, an aging population, climate risks and creaking institutions. There's added pressure from President Donald Trump over Vietnam’s trade surplus with the U.S., a reflection of its astounding economic trajectory. In 1990, the average Vietnamese could afford about $1,200 worth of goods and services a year, adjusted for local prices. Today, that figure has risen by more than 13 times to $16,385. Vietnam's transformation into a global manufacturing hub with shiny new highways, high-rise skylines and a booming middle class has lifted millions of its people from poverty, similar to China. But its low-cost, export-led boom is slowing, while the proposed reforms — expanding private industries, strengthening social protections, and investing in tech, green energy. It faces a growing obstacle in climate change. “It’s all hands on deck...We can’t waste time anymore," said Mimi Vu of the consultancy Raise Partners. The export boom can’t carry Vietnam forever Investment has soared, driven partly by U.S.-China trade tensions, and the U.S. is now Vietnam's biggest export market. Once-quiet suburbs have been replaced with industrial parks where trucks rumble through sprawling logistics hubs that serve global brands. Vietnam ran a $123.5 billion trade surplus with the U.S. trade in 2024, angering Trump, who threatened a 46% U.S. import tax on Vietnamese goods. The two sides appear to have settled on a 20% levy, and twice that for goods suspected of being transshipped, or routed through Vietnam to avoid U.S. trade restrictions. During negotiations with the Trump administration, Vietnam's focus was on its tariffs compared to those of its neighbors and competitors, said Daniel Kritenbrink, a former U.S. ambassador to Vietnam. “As long as they’re in the same zone, in the same ballpark, I think Vietnam can live with that outcome," he said. But he added questions remain over how much Chinese content in those exports might be too much and how such goods will be taxed. Vietnam was preparing to shift its economic policies even before Trump's tariffs threatened its model of churning out low-cost exports for the world, aware of what economists call the “middle-income trap,” when economies tend to plateau without major reforms. To move beyond that, South Korea bet on electronics, Taiwan on semiconductors, and Singapore on finance, said Richard McClellan, founder of the consultancy RMAC Advisory. But Vietnam's economy today is more diverse and complex than those countries were at the time and it can’t rely on just one winning sector to drive long-term growth and stay competitive as wages rise and cheap labor is no longer its main advantage. It needs to make “multiple big bets,” McClellan said. Vietnam's game plan is hedging its bets Following China's lead, Vietnam is counting on high-tech sectors like computer chips, artificial intelligence and renewable energy, providing strategic tax breaks and research support in cities like Hanoi, Ho Chi Minh City, and Danang. It's also investing heavily in infrastructure, including civilian nuclear plants and a $67 billion North–South high-speed railway, that will cut travel time from Hanoi to Ho Chi Minh City to eight hours. Vietnam also aspires to become a global financial center. The government plans two special financial centers, in bustling Ho Chi Minh City and in the seaside resort city of Danang, with simplified rules to attract foreign investors, tax breaks, support for financial tech startups, and easier ways to settle business disputes. Underpinning all of this is institutional reform. Ministries are being merged, low-level bureaucracies have been eliminated and Vietnam's 63 provinces will be consolidated into 34 to build regional centers with deeper talent pools. Private business to take the lead Vietnam is counting on private businesses to lead its new economic push — a seismic shift from the past. In May, the Communist Party passed Resolution 68. It calls private businesses the “most important force” in the economy, pledging to break away from domination by state-owned and foreign companies. So far, large multinationals have powered Vietnam's exports, using imported materials and parts and low cost local labor. Local companies are stuck at the low-end of supply chains, struggling to access loans and markets that favored the 700-odd state-owned giants, from colonial-era beer factories with arched windows to unfashionable state-run shops that few customers bother to enter. “The private sector remains heavily constrained," said Nguyen Khac Giang of Singapore’s ISEAS–Yusof Ishak Institute. Again emulating China, Vietnam wants “national champions” to drive innovation and compete globally, not by picking winners, but by letting markets decide. The policy includes easier loans for companies investing in new technology, priority in government contracts for those meeting innovation goals, and help for firms looking to expand overseas. Even mega-projects like the North-South High-Speed Rail, once reserved for state-run giants, are now open to private bidding. By 2030, Vietnam hopes to elevate at least 20 private firms to a global scale. But Giang warned that there will be pushback from conservatives in the Communist Party and from those who benefit from state-owned firms. A Closing Window from climate change Even as political resistance threatens to stall reforms, climate threats require urgent action. After losing a major investor over flood risks, Bruno Jaspaert knew something had to change. His firm, DEEP C Industrial Zones, houses more than 150 factories across northern Vietnam. So it hired a consultancy to redesign flood resilience plans. Climate risk is becoming its own kind of market regulation, forcing businesses to plan better, build smarter, and adapt faster. “If the whole world will decide it’s a priority...it can go very fast,” said Jaspaert. When Typhoon Yagi hit last year, causing $1.6 billion in damage, knocking 0.15% off Vietnam’s GDP and battering factories that produce nearly half the country’s economic output, roads in DEEP C industrial parks stayed dry. Climate risks are no longer theoretical: If Vietnam doesn’t take strong action to adapt to and reduce climate change, the country could lose 12–14.5% of its GDP each year by 2050, and up to one million people could fall into extreme poverty by 2030, according to the World Bank. Meanwhile, Vietnam is growing old before it gets rich. The country’s “golden population” window — when working-age people outnumber dependents — will close by 2039 and the labor force is projected to peak just three years later. That could shrink productivity and strain social services, especially since families — and women in particular — are the default caregivers, said Teerawichitchainan Bussarawan of the Centre for Family and Population Research at the National University of Singapore. Vietnam is racing to pre-empt the fallout by expanding access to preventive healthcare so older adults remain healthier and more independent. Gradually raising the retirement age and drawing more women into the formal workforce would help offset labor gaps and promote "healthy aging,” Bussarawan said. ___ The Associated Press’ climate and environmental coverage receives financial support from multiple private foundations. AP is solely responsible for all content. Find AP’s standards for working with philanthropies, a list of supporters and funded coverage areas at AP.org.

MELBOURNE, Australia (AP) — Australia’s central bank on Tuesday reduced its benchmark interest rate by a quarter percentage point for a third time this year to 3.6%, with inflation tamed and economic growth stalling. The Reserve Bank of Australia reduced its cash rate from 3.85%. The rate was cut from 4.1% in May. The reduction from 4.35% at its February board meeting was Australia’s first rate cut since October 2020. The new rate is the lowest since March 2023 and the cut was widely anticipated as inflation continues to fall. The bank adjusts interest rates to steer inflation toward a target band of between 2% and 3%. In May, annual inflation fell to 2.1% from 2.4% a month earlier. The trimmed mean — a gauge of underlying inflation that is the bank’s preferred measure — fell from 2.8% in April to 2.4%. Inflation has gradually declined since it peaked at 7.8% in the last quarter of 2022. The bank was widely expected to cut the rate at its last board meeting in July. But directors voted 6-to-3 to wait to see inflation data for the June quarter. That data revealed that trimmed mean inflation was 2.7% in the three months through June, down from 2.9% in the March quarter. The economic boost of a rate cut comes after growth slowed to a sluggish 0.2% in the three months through March and 1.3% for the year. The economy grew 0.6% in the preceding December quarter. The bank has attempted to gradually rein in inflation without tipping the economy into recession or causing large-scale job losses. Unemployment rose to 4.3% in June from 4.1% where it had held steady since February. The jobless rate was at 4.0% in January.