Lee EBCS: First Quarter 2026 Report
February 02, 2026 / RERI Research Team
Lee County Executive Business Climate Survey First Quarter 2026 Report
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 3.50 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.
Consumer sentiment improved for the second consecutive month, gaining 3.5 points in January 2026 to 56.4. The latest press release from the University of Michigan Survey of Consumers notes that “national sentiment remains more than 20 percent below a year ago, as consumers continue to report pressures on their purchasing power stemming from high prices and the prospect of weakening labor markets.” Optimism amongst business owners also improved to end the year, with the NFIB Small Business Optimism Index registering at 99.5 in December 2025 and remaining above its 52-year average of 98. Bill Dunkelberg, chief economist at the NFIB, noted that “while Main Street business owners remain concerned about taxes, they anticipate favorable economic conditions in 2026 due to waning cost pressures, easing labor challenges, and an increase in capital investments.”
The latest results from the Lee County Executive Business Climate Survey suggest improving optimism amongst local business owners as well. The Executive Business Climate Index (EBCI) rose 4.3 points from the previous quarter to 54.4 in 2026 Q1. This uptick was driven by increases in both current and future economic conditions (up 7.9 and 2.8 points) and industry conditions (up 6.8 and 2.4 points). Sentiment surrounding labor market conditions also improved amongst participating executives, with both current and future hiring trends ticking upwards (up 2.9 and 0.8 points). This renewed optimism is encouraging for Lee County, where the unemployment rate has increased in recent months.
Downloads:
Lee County Executive Business Climate Survey First Quarter 2026 Report
Previous Lee County Executive Business Climate Survey Reports
Acknowledgments:
We would like to thank all of the executives that participated in our survey. Without your continued feedback each quarter, our surveys would not be possible. Furthermore, we would also like to thank our partners, the Horizon Council and Lee County Economic Development, for helping make the survey happen.
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