EconoTicker

The Congressional Budget Office (CBO) estimates that most of the recent GDP decline would eventually be recovered, but $7 billion to $14 billion of output would not return, implying a small but permanent loss in the level of activity. Economists also estimate the economy grew 2.2% in 2025, down from 2.8% in 2024.

Labor-market momentum cooled sharply: only 181,000 jobs were added last year—the fewest outside the pandemic since the 2009 Great Recession—down from 1.459 million added in 2024.

Source: U.S. Congressional Budget Office (CBO); economists’ estimates.

The Fed’s balance sheet eased to $6,613B from $6,622B, continuing the gradual runoff trend. Reserve balances held in a tight range but edged higher to $2.960T from $2.958T, suggesting stable system liquidity even as QT grinds on.

Source: Federal Reserve Statistical Release H.4.1.

The Atlanta Fed’s GDPNow model lowered its Q4 growth tracking estimate to 3.0%, down from 3.6% previously—signaling a cooler near-term growth pulse in the model’s nowcast.

Market lens: A downgrade in GDPNow can temper “overheating” narratives and slightly ease pressure on rates—especially if confirmed by softer consumption or investment data.

Source: Federal Reserve Bank of Atlanta (GDPNow).

U.S. Treasury auction results showed stable short-bill funding costs and a lower stop-out real yield in long-dated inflation protection. The 4-week bill cleared at 3.625% (vs 3.630% prior), while the 8-week bill held at 3.630% (unchanged). In the long end, the 30-year TIPS auction stopped at a 2.473% real yield, down from 2.650% previously—suggesting comparatively stronger demand for long-run inflation-protected duration at lower real yields.

Source: U.S. Department of the Treasury (auction results/TreasuryDirect).

U.S. Pending Home Sales fell -0.8% MoM in January, a clear miss versus +1.4% expected, though an improvement from the prior -7.4% drop. The Pending Home Sales Index ticked down to 70.9 from 71.5, highlighting ongoing rate/affordability headwinds.

Source: National Association of Realtors (NAR).

The U.S. Leading Economic Index (LEI) fell -0.2% MoM in December, matching expectations (-0.2%) and improving slightly from the prior -0.3%. The print still points to muted forward growth signals, even if the pace of deterioration eased.

Source: The Conference Board (LEI).

The February Philly Fed under-the-hood data showed a sharp improvement in business conditions, while price pressure cooled and investment/new-order signals softened. Business Conditions jumped to 42.8 (from 25.5). Prices Paid fell to 38.90 (from 46.90), suggesting easing input inflation. But CAPEX dropped to 14.40 (from 30.30) and New Orders eased to 11.7 (from 14.4).

Market lens: The mix reads as stronger current activity but less momentum in forward demand and investment, with inflation pressure showing signs of moderation.

Source: Federal Reserve Bank of Philadelphia.

U.S. trade data for December showed a sharper deterioration. The goods trade balance widened to -$98.50B (vs -$86.00B expected; prior -$86.04B). The overall trade balance also printed a larger deficit at -$70.30B (vs ~-$55.50B expected; prior -$53.00B). Exports fell to $287.30B (prior $292.30B) while imports rose to $357.60B (prior $345.30B).

Source: U.S. Census Bureau / Bureau of Economic Analysis (international trade data; advance goods trade where applicable).

The Philadelphia Fed Manufacturing Index surprised to the upside in February, rising to 16.3 (vs 7.5 expected; prior 12.6), signaling improving factory momentum in the region. But the Philly Fed employment component weakened to -1.3 (prior 9.7), hinting that hiring intentions cooled even as activity improved.

Source: Federal Reserve Bank of Philadelphia (Philly Fed).

U.S. labor market signals remained firm, with Initial Jobless Claims dropping to 206K (vs 223K expected; prior 229K), pointing to still-low layoff activity. Continuing Claims ticked up to 1,869K (vs 1,860K expected; prior 1,852K), suggesting a slightly longer duration for some unemployed workers. The 4-week average eased to 219K (prior 220K).

Market lens: Low initial claims keep the “tight labor market” narrative alive, while the gradual rise in continuing claims hints at some cooling in re-employment speed.

Source: U.S. Department of Labor.

U.S. inventory data for December pointed to a modest restocking backdrop. Retail inventories excluding autos rose +0.2% after -0.2% previously, signaling a turn back into positive inventory accumulation at retailers. Wholesale inventories were unchanged at +0.2% MoM, matching expectations and the prior reading (+0.2%).

Market lens: A gentle inventory rebuild can add support to near-term GDP arithmetic, but it also raises the question of whether demand stays firm enough to absorb higher stock levels.

Source: U.S. Census Bureau (Monthly Retail Trade and Wholesale Trade reports).

Minutes from the Federal Reserve’s latest meeting signaled a more hawkish tilt than markets had hoped, showing policymakers divided on the path ahead. Several officials argued rates may need to stay higher for longer, and some indicated they would be open to further rate hikes if inflation proves sticky. The message reinforced expectations that U.S. policy will remain restrictive, a setup that can tighten global financial conditions and keep higher-beta Asian currencies under pressure as yield differentials favor the dollar.

Source: U.S. Federal Reserve (FOMC meeting minutes).