Overview:   The Fed held constant its target range of 0.0% to 0.25% for the federal funds rate.  Productivity fell 0.9% in the 2^nd quarter.  The trade deficit widened $7.9 billion to $49.9 billion in June.  The Treasury recorded a deficit of $165 billion in July.  Retail sales rose 0.4% in July.  The topline CPI increased 0.3% while the core CPI edged up 0.1%.  Business inventories increased 0.3% in July.  Initial jobless claims rose by 2,000 to a level of 484,000 for the week ended 8/7.

The Fed held constant its target for the federal funds rate at a range of 0.0% to 0.25% at its meeting on Tuesday. The Fed’s statement noted that the pace of the recovery in output and employment has slowed and is likely to be more modest than previously anticipated. The Fed also stated its plans to hold constant its current level of securities holdings by reinvesting into longer-term Treasuries principal payments from agency backed debt and mortgage-backed securities.

Productivity unexpectedly declined 0.9% in the 2^nd quarter, following five quarters of exceptionally high productivity growth. Productivity for the 1^st quarter was revised upwards to 3.9%, from an earlier estimate of 2.8%. The drop in productivity could point to more hiring if employers desire to increase output.

The U.S. trade balance widened by a greater-than-expected $7.9 billion to $49.9 billion in June. Driving the increase was the biggest drop in exports in over a year, which was attributed to a slowing of growth around the world as well as action by some of the fastest growing economies (China and India) to prevent their expansions from overheating.

The U.S. Treasury recorded a deficit of $165 billion in July.

Retail sales rose 0.4% in July; excluding autos, sales were up 0.2%.

The topline consumer price index increased 0.3% in July; the core CPI edged up 0.1%.

Business inventories increased 0.3% in July.

Initial jobless claims rose by 2,000 to 484,000 for the week ended August 7^th.