Economic Update for February From Endeavour Wealth Management
As we enter 2026, the U.S. economy continues to demonstrate resilience, though signs of slowing momentum are becoming more evident. Economic growth remained solid earlier in 2025, with real GDP expanding at a strong pace mid-year. However, growth cooled meaningfully in the second half, and consensus forecasts now point to GDP growth in the 1.8%-2.0% range for 2026, well below the post-pandemic highs.
Monetary policy has begun to shift. In late 2025, the Federal Reserve lowered the federal funds rate, reflecting progress on inflation and a desire to support economic activity. Fed officials have emphasized that future policy decisions will be data-dependent, balancing moderating inflation against a gradually softening labor market. While further easing is possible, it is not pre-committed.
Inflation has continued to cool but remains above the Fed’s long-run target. Recent data show headline inflation running near 2.7%-3.0%, suggesting that price pressures are easing at a measured pace rather than falling rapidly. This gradual disinflation supports a cautious approach to further rate cuts.
Labor market conditions have softened compared with prior years.
Job growth has slowed, and the unemployment rate has drifted higher, hovering around the mid-4% range. While this represents a cooling from historically tight conditions, the labor market has not shown broad-based stress.
Looking ahead, the economic outlook remains finely balanced.
Ongoing private-sector investment, particularly in technology and artificial intelligence, may provide support to growth, but policy uncertainty, global risks, and tighter financing conditions remain meaningful headwinds.
Bottom line: The U.S. economy is still expanding, but momentum is slowing. For investors, maintaining exposure to high-quality assets, ample liquidity, and companies with strong cash flows and pricing power remains a prudent strategy in an increasingly uncertain environment.
Securities and investment advisory services offered through Osaic Wealth, Inc. Member FINRA/SIPC. Osaic Wealth is separately owned, and other entities and/or marketing names, products, or services referenced here are independent of Osaic Wealth.
