Economic Pulse Check: Data Signals Caution

February's early economic indicators are flashing yellow

February's Reality Check

The jobs report delivered 151,000 new positions against expectations of 170,000, with unemployment ticking up to 4.1%. The sectoral breakdown reveals healthcare (+52,000), financial services (+21,000), and warehousing (+18,000) growth, while retail shed 6,000 jobs and federal employment dropped by 10,000.

Consumer spending fell 3.4% year-over-year in February. Even adjusted for Leap Year effects, spending was essentially flat, with a concerning one-day collapse on February 28th where debit card sales plummeted 10.7% and credit sales fell 6.2%. Meanwhile, the Consumer Confidence Index dropped to 98.3 from January's 105.3—the largest monthly decline in over four years.

The Tariff Inflation Paradox

Potential tariffs could add 0.5-2.2 percentage points to inflation (depending on how sweeping they end up being)…