Month: March 2026

by paul gomme and peter rupert

The BLS announced that the CPI in February rose 3.25% on an annualized basis. Year over CPI inflation was 2.43% up from 2.39% in the previous month. Our preferred trend measure was little changed at 2.68% compared to the previous month. Anticipation of the war appears to have pushed up oil prices in February which may account for the 11.1% (250% annualized) monthly increase in fuel oil.

The annualized core measure (ex food and energy) fell from 3.59% to 2.62%, year over year changed little coming in at 2.47% compared to 2.51% in the previous month. Our trend measure, 2.68% was little changed from the previous month’s 2.71%.

Drilling down farther, the CPI for services less rent on shelter shows a 3.34% increase in our trend measure, although the monthly number has come down from 4.25% in January to 3.43% in February.

The Fed continues to be in a bit of a pickle. While inflation is moving in the wrong direction, there are signs of weakness in the labor market. At this time, however, keeping inflation in check is job one for the Fed and we see no convincing argument for lowering rates in the near future.

by paul gomme and peter rupert

The BLS announced that payroll employment dipped 92,000. The decline was pretty widespread as there were a lot of negative signs across almost all industries. The private sector declined 86,000. Both the information and government sectors continued their long decline.

The health care industry was likely affected the employment numbers. Healthcare work stoppages increased 58.3% and the number of workers involved rose 151.9% from 2024 to 2025 — the largest increase of any industry. Healthcare accounted for 40.3% of all striking workers and ranked first in total strike days with over 1.2 million. In January 2026, 31,000 members of UNAC/UHCP went on strike at Kaiser Permanente facilities in California and Hawaii — the largest open-ended strike of registered nurses and healthcare professionals in US history. After four weeks, the union announced an unconditional return to work as negotiations moved closer to resolution.

Nearly 15,000 nurses across four New York City hospitals began an open-ended strike on January 12, 2026. Nurses at Montefiore and Mount Sinai eventually ratified new contracts, while about 4,200 nurses at NewYork-Presbyterian remained on strike as of mid-February.

Average weekly hours remained at 34.3 and average hourly earnings increased from $37.13 to $37.32 (0.4%). Indeed, over that past couple of years, real earnings have risen as year over year earnings growth has exceeded CPI growth.

The unemployment nudged up from 4.32% to 4.44%

Policy Outlook

We expect to see lots of chatter about what the FOMC should do at its next meeting. The inflation rate remains above the Fed’s 2% target. The January employment report was generally considered meh; February’s will be a cause for concern. Output growth for 2025Q4 was neither too hot nor too cold. The war with Iran adds to uncertainty. Good time to hold rates steady?