Good Afternoon. On this day in 1954, the Navy commissioned USS Nautilus, its first nuclear-powered submarine. A new engine changed how long it could stay underwater; the test was the full voyage, not the ceremony.

Today's economy has its own endurance test. U.S. inflation cooled in August while consumers kept spending and employers added jobs, yet strong growth is keeping bond yields uncomfortable. Corporate results and overseas factory reports show why the next question isn't whether the engine runs, but how efficiently it carries the load.

—Rosie, Wyatt, Evan & Conor

🔥 What’s Hot: 🔥

🥶 What’s Not: 🥶

🔢 Big number: $44.5 billion — Jabil's projected fiscal 2027 revenue, up an expected 24% from fiscal 2026. It's a forecast, not an order already delivered; the company must turn new capacity and customer demand into profitable production.

The Federal Reserve's preferred inflation measure brought some relief today, though it didn't declare the price problem over. August's yearly price growth slowed while households spent more. That's an awkward pairing for anyone hoping that slower inflation must also mean an economy weak enough to remove pressure for higher interest rates.

The news: The personal consumption expenditures price index rose 3.4% from a year earlier, below economists' 3.7% expectation. Prices still climbed 0.3% from July. Excluding food and energy, the yearly increase was 3.0%, and the monthly increase was 0.2%. The distinction matters: cooling from a hotter rate isn't the same as prices falling. Americans also stepped up their spending, suggesting that demand hasn't simply stalled.

What’s next: Investors initially welcomed the softer reading, but the spending side leaves the Fed with a harder judgment. Watch whether the next monthly inflation reports keep improving without a renewed acceleration in services or energy costs. Borrowers shouldn't treat one encouraging report as a promise of cheaper credit; the central bank still has to weigh persistent price pressure against the strength of household demand.

Source: Associated Press

Today's revision to spring economic growth made the consumer's staying power harder to dismiss. It covers April through June, not the current quarter, so it shouldn't be mistaken for a fresh forecast. But the added detail helps explain why bond investors are reluctant to assume slower inflation will quickly lead to lower rates.

The news: The Commerce Department raised its second-quarter gross domestic product estimate to a 2.2% annual pace from 1.5%. Consumer spending grew at a 3.8% annual pace, versus 0.7% in the first quarter. A measure of underlying domestic demand that excludes volatile trade and government spending rose 4.6%. Better spending and business investment were the main reasons the previous estimate wasn't high enough.

Bottom line: Revisions don't put money in consumers' pockets today, but they change the baseline for judging resilience. The next test is whether summer's spending holds up when financing costs remain high and confidence is shaky. Strong growth can support profits while also delaying the interest-rate relief that businesses and households want; both effects can be true at once.

Source: Associated Press

Jabil's results show what the artificial-intelligence buildout looks like beyond the chip designers. Customers need equipment engineered, assembled and delivered at scale, and the manufacturer says it has added capacity to take on more of that work. The opportunity is substantial; the execution burden rises with it.

The news: Preliminary fiscal fourth-quarter revenue reached $10.6 billion. For the full fiscal year, revenue grew 21%, core operating margin expanded 40 basis points, and adjusted free cash flow exceeded $1.5 billion. Management expects $44.5 billion in fiscal 2027 revenue, up 24%, with core margin reaching 6.1%. It says that outlook isn't just about AI: automotive, healthcare and energy infrastructure are expected to grow, too.

Big picture: New capacity and engineering complexity can make a manufacturer more valuable to customers, but only if factories run efficiently and commitments become shipments. The projected margin improvement is modest relative to the revenue jump, so watch utilization, cash conversion and customer concentration as the buildout advances. These preliminary figures and next-year targets aren't guaranteed earnings.

Source: Jabil Investor Relations

U.S. private employers hired faster in September after a three-month slowdown, according to ADP's payroll-based measure. The rebound gives households a better footing than an outright hiring freeze would. Its composition matters, though: the jobs were not spread evenly across industries, and this report isn't the government's monthly payroll count.

The news: ADP estimated a gain of 90,000 private-sector jobs. Education and health services added 55,000 positions, and leisure and hospitality added 22,000. Financial activities shed 16,000, while professional and business services lost 11,000. Base pay rose 3.2% and gross pay rose 4.7% from a year earlier. It wasn't broad-based, but the company called it the first hiring acceleration since May.

What’s next: A stronger headline helps, but the narrowness of the gains leaves Friday's government jobs report important. If hiring remains concentrated in a couple of service categories, workers elsewhere may still feel a difficult job search. Employers should watch wage pressure along with openings: steady pay can sustain consumption, but it also makes labor-intensive operations harder to budget.

Source: ADP Research

Financial-data customers are paying for tools they can keep using, not just experimenting with another AI feature. FactSet's latest results suggest that recurring contracts and longer renewals are doing much of the work. That's more informative than a splashy product announcement because it tests whether clients see value after the pilot ends.

The news: Fiscal fourth-quarter revenue rose 6.3% to $634.7 million, while organic annual subscription value increased 7.0% to $2.57 billion at year-end. Annual subscription retention stayed above 95%, and average renewal contract length increased by roughly 30% during the quarter. FactSet says the value of AI solutions added during fiscal 2026 more than doubled from the prior year, although it didn't disclose an absolute dollar amount for that contribution.

Bottom line: The stronger subscription base gives FactSet visibility, but retention alone doesn't reveal how much customers will pay for new AI workflows. Watch whether the added products deepen contracts without eroding margins or requiring costly service work. For software buyers, the lesson is to ask whether a tool becomes part of a daily process, not just whether it can produce a convincing demonstration.

Source: FactSet via GlobeNewswire

China's official factory survey returned to expansion in September after two months below the dividing line. More production helped, but smaller producers and employment still lagged. That gap matters to suppliers: a national reading just above fifty doesn't mean every factory has a fuller order book.

The news: The manufacturing purchasing managers' index rose to 50.1 from 49.8 in August; readings above 50 indicate expansion. Production climbed to 51.7 and new orders stood at 50.5. Large firms registered 50.6, while small firms remained at 48.9 and the employment subindex at 48.4. The official data therefore show a recovery in output that hasn't yet spread evenly through the labor force or smaller businesses.

Big picture: A return above fifty is a useful stabilization signal, not proof of a broad boom. Watch whether new orders keep improving and whether smaller firms and hiring follow production upward. If those pieces stay weak, the expansion won't be broad; it may depend on larger manufacturers rather than a sustained rebound in domestic demand.

Source: National Bureau of Statistics of China

Britain grew a little faster in the second quarter than first estimated. Newly incorporated business information lifted the official figure, and households' real disposable income also recovered. The change is welcome, but one revised quarter doesn't settle whether consumers can keep carrying growth through higher costs.

The news: The Office for National Statistics revised April-to-June GDP growth to 0.5% from 0.4%. Services expanded 0.6% and construction 0.8%, while production edged down 0.1%. Real household disposable income per person rose 1.0% after falling 0.8% in the prior quarter; the household saving ratio reached 8.8%. The revision doesn't reflect a new surge; additional survey and tax data changed the estimate.

What’s next: Better income gives households more room, but the saving increase suggests they didn't spend every extra pound. Watch the next quarter's consumer activity and business investment before reading today's backward-looking revision as a new acceleration. The split between stronger services and softer production also matters for how widely the improvement can be felt.

Source: Office for National Statistics

Japan's industrial production unexpectedly slipped in August, with vehicle output doing much of the damage. Weather and an earthquake disrupted operations, making the drop more specific than a broad collapse in factory demand. Still, temporary shocks can carry over if suppliers need time to catch up.

The news: Output fell 1.7% from July, against economists' expectation of a 1.7% increase in a Reuters poll. Motor-vehicle production declined 6.8% after an earthquake and typhoon interrupted work; general-purpose and business machinery also fell. The decline followed another weak month, so a quick rebound can't be assumed even if production schedules normalize.

Bottom line: The next data release should show whether automakers recoup lost production or whether the interruption exposed a more persistent supply problem. For global buyers, a production dip in one major manufacturing country can ripple through parts deliveries. Don't treat it as a wider downturn without separating the recoverable disruption from underlying orders.

Source: Reuters

Q: Why don’t scientists trust atoms?

A: Because they make up everything.

Fixed-cost absorption: spreading a factory's relatively stable overhead, such as equipment and facility costs, across the units it produces. Higher output can lower overhead per unit if other costs don't rise as quickly.

In a sentence: Jabil's new AI capacity will help margins only if customer orders keep the added production lines busy enough for fixed-cost absorption to work.

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