Treasury
The U.S. Bureau of Labor Statistics reported on Friday that the economy unexpectedly lost 92,000 jobs in February, while Middle East hostilities pushed oil prices to their highest levels since 2022, intensifying inflation concerns. The unemployment rate rose by 0.1 percentage point to 4.4%, breaking Fed officials' expectations of a stabilizing labor market. San Francisco Fed President Daly stated that both mandates face risks, while Cleveland Fed President Hammack argued that policy should continue to wait and see. Interest rate futures markets have raised the probability of a June rate cut from 33.3% to 50.3%.
Costco CEO Ron Vachris said on an earnings call that if the company receives tariff refunds, it will be committed to passing the value back to members through measures such as price reductions. This follows the U.S. Supreme Court's ruling that the broad tariffs imposed by the Trump administration under IEEPA were invalid.
A joint survey by AICPA and CIMA shows that in the first quarter of 2026, CEO and CFO optimism about the economy and business prospects significantly rebounded from the previous quarter, with 55% of respondents planning to adopt more aggressive expansion strategies. Although the Middle East conflict could push up energy prices and affect inflation, corporate investment intentions have strengthened, and expectations for revenue and profit growth have been revised upward.
ISM data showed that U.S. service sector expansion in February was the fastest since mid-2022, with the new orders index rising 5.5 percentage points month-over-month and the business activity index up 2.5 percentage points. The supplier deliveries index climbed for the 15th straight month, with 14 industries reporting growth and only 3 contracting. Steve Miller, chair of the ISM Services Business Survey Committee, said that despite lingering tariff uncertainty, businesses are equipped to handle policy changes.
A survey released by the Federal Reserve on Tuesday shows that nearly three-quarters of small businesses view inflation as their biggest financial challenge, with 42% listing tariffs as a major issue. 48% of small businesses import goods, and 84% of those report higher import prices. New York Fed President Williams said tariffs have significantly raised import prices, and the full impact has not yet fully materialized.
The ISM manufacturing index came in at 52.4 in April, slightly down from 52.6 in March but still above the 50 threshold indicating expansion. The prices paid index jumped 11.5 points to 70.5, the highest since June 2022. The employment index rose 0.7 percentage points but remained in contraction territory. Analysts noted that rising energy prices, weakening consumer demand, and tariff-related costs and uncertainty remain key headwinds for the manufacturing sector.
U.S. January Producer Price Index (PPI) rose 0.5% month-over-month and 2.9% year-over-year, both exceeding expectations, indicating that inflationary pressures remain stubborn. Service prices rose 0.8% month-over-month, the largest increase since last July, while goods prices fell 0.3% month-over-month. After the data release, interest rate futures markets raised the probability of a Fed rate cut in June to 58%. Fed Governor Waller stated that a robust labor market may support keeping rates unchanged, but if employment data weakens, a March rate cut remains possible.
A survey released by The Conference Board on Tuesday showed that the consumer confidence index rose 2.2 points to 91.2 this month, as the proportion of consumers who believe jobs are plentiful climbed to a three-month high of 28%. However, factors such as inflation remaining above the Federal Reserve's target and slowing economic growth in the fourth quarter continue to keep consumers cautious.
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.
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.