Treasury
NABE Survey: Deficit Reduction Becomes Top US Policy Issue
A survey released Monday by the National Association for Business Economics (NABE) shows that 61% of business economists believe current fiscal policy is too stimulative, and 46% advocate making deficit and debt reduction the top policy priority. The survey was conducted before the Supreme Court ruled most tariffs illegal.
US Q4 GDP growth misses expectations, federal government shutdown and weak exports drag economy
The US economy grew at an annualized rate of 1.4% in the fourth quarter, below expectations, dragged down by the federal government shutdown and declining exports. Full-year growth was 2.2%. The Supreme Court ruled most of Trump's tariffs illegal, and Trump said he would seek other legal grounds to impose a 10% global tariff.
The Conference Board: Economic Data Points to Weak Start in 2026
The Conference Board reported Thursday that the U.S. economy may see a weak start in the first half of 2026, mainly dragged by low consumer confidence and reduced manufacturing new orders. The Leading Economic Index (LEI) fell 0.2% month-over-month in December, marking the fifth consecutive monthly decline. Despite strong stock market performance, increased private residential building permits, and a positive credit environment and risk mix, rising unemployment insurance claims and a decline in average weekly manufacturing hours further dampened the economic outlook. The organization expects economic growth of 2.1% this year.
Fed officials worry inflation will remain above 2% target, hinting at possible rate hikes
The latest Fed meeting minutes show officials are concerned about inflation persistently above the 2% target and warn that further rate cuts could be misinterpreted as weakening resolve against inflation. Most officials support holding rates steady, but two governors advocate for continued cuts. Post-meeting data show inflation slowed in January, but services inflation remains high.
Inflation falls to 2.4%, but affordability concerns persist
Data from the U.S. Bureau of Labor Statistics shows that January inflation rose 2.4% year-over-year, below the expected 2.7%; core inflation fell to 2.5%. Energy prices dropped 1.5%, while housing prices edged up 0.2%. Despite favorable inflation data, consumer confidence remains low, retail sales are flat, and concerns in the job market persist. Interest rate futures markets indicate a higher probability of Fed rate cuts this year, but experts believe a cut is unlikely during Chair Powell's tenure.
New York Fed: U.S. Businesses and Consumers Bear Nearly 90% of Tariff Costs
The New York Fed released a report on Thursday stating that in 2025, U.S. businesses and consumers bore nearly 90% of tariff costs, refuting the Trump administration's claim that foreigners bear the tariff burden. The report noted that the 'Liberation Day' tariffs in April raised the average tariff rate from 2.6% to 13%, with imported goods prices rising more than untaxed goods. Research from the Kiel Institute, the Tax Foundation, and the Yale Budget Lab also supports this conclusion.
Job growth exceeds expectations, unemployment rate falls to 4.3%
The U.S. unemployment rate fell to 4.3% in February, with nonfarm payrolls adding 130,000 jobs, far exceeding expectations. The healthcare sector added 82,000 jobs, the largest increase since 2020. However, the financial services industry cut 22,000 jobs, and the average monthly job growth for last year was revised down to 15,000, indicating lingering concerns in the labor market.
December retail sales flat, confirming weak consumer confidence
U.S. retail sales were unexpectedly flat in December, following a 0.6% increase in November. Census Bureau data aligns with recent surveys, showing consumers entering the new year with subdued sentiment. Several Federal Reserve officials expressed divergent views on the economic outlook, while household debt delinquency rates climbed to their highest level since 2019.
University of Michigan Survey: Non-Shareholders' Sentiment 'Gloomy' as Stock Market Gains Lift Overall Confidence
The University of Michigan's February survey shows U.S. consumer confidence rose slightly due to the stock market boom, but sentiment among consumers who do not own stocks remains 'gloomy.' Survey director Joanne Hsu noted that concerns over high prices and unemployment risks remain widespread. The data also confirms the 'K-shaped economy' trend: the top 20% of households earning over $175,000 annually contributed nearly 60% of consumer spending in the third quarter of 2025. Federal Reserve officials Jefferson and Cook both acknowledged the overall economy is solid, but lower-income households face challenges such as rising default rates.
U.S. Job Openings Fall to Lowest Level in More Than Five Years: BLS
The U.S. Bureau of Labor Statistics reported on Thursday that job openings fell to 6.5 million in 2025, the lowest level since September 2020. Meanwhile, initial jobless claims exceeded expectations. Private-sector hiring was weak, and layoffs surged in January, with economists warning that the hiring downturn could persist.