From the Desk - Economic Commentary
Scott Hofer, Member Strategies Manager - 3/6/2026
U.S. stocks are falling this morning due to oil prices spiking, continued geopolitical uncertainty, and a surprise jobs report. On the economic data front, the U.S. labor market showed a sharp and unexpected weakening in February, with nonfarm payrolls declining by 92,000 jobs, missing expectations of increasing 50,000 to 60,000 and marking the third decline in the past five months. The unemployment rate ticked up to 4.4% from 4.3% in January, reflecting softer labor conditions and downward revisions to prior months’ data. The Bureau of Labor Statistics also revised January job gains down by 4,000 and December by 65,000. indicating job growth was weaker than initially reported. Overall, the February report signals increased labor market fragility, softer hiring across key sectors, and growing uncertainty about the economic outlook heading into spring.
Next, U.S. retail and food services sales fell 0.2% in January 2026, marking a modest pullback in consumer spending after December’s flat reading. The Census Bureau reported total sales of $733.5 billion, down slightly from December but still 3.2% higher than January 2025, showing year over year resilience despite monthly weakness. Overall, January’s report suggests soft but not collapsing consumer demand, with weakness concentrated in fuel, apparel, health products, and autos—partially offset by strength in home related categories and online retail.
Finally, the latest data shows that U.S. business inventories rose 0.1% in December, in line with expectations and matching November’s 0.1% increase. The report shows inventories increasing across manufacturers, wholesalers, and retailers, though at a slower pace than earlier in the year. The slight December uptick follows several months of moderate inventory adjustments, reflecting continued caution among firms navigating uncertain demand conditions heading into 2026. Overall, December’s 0.1% rise signals steady but subdued stockpiling, suggesting businesses are neither aggressively building inventories nor drawing them down sharply as they monitor economic conditions.
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