Regional Economic Indicators: February 2026 Report
February 02, 2026 / RERI Research Team
Headline numbers paint a mixed picture for the US economy, with solid growth tempered by a softening labor market and persistent inflation. Real Gross Domestic Product (GDP), an overall measure of economic activity, grew at annualized rate of 4.4 percent in the third quarter, reflecting increases in consumer spending, government spending and exports. Meanwhile, the headline unemployment rate rose to 4.4 percent in December 2025, up 0.3 percentage points year-over-year as total unemployment grew faster than total employment amid a cooling labor market inducing slower hiring and fewer workers quitting. Inflation, as measured by the Consumer Price Index, was slightly elevated at 2.7 percent in December. Altogether, this combination of data has painted a picture of uncertainty for the Federal Open Market Committee (FOMC), who opted to take a wait-and-see approach on the economy and hold the federal funds rate at 3.5 to 3.75 in January 2026. FOMC Chair Jerome Powell emphasized a cautious, data-dependent approach, noting that future decisions depend on changes in inflation and labor market conditions.
