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Economic Data Review: Q1 2026
A frozen labor market meets an oil price shock
The Federal Reserve begins its two-day meeting today and is widely expected to hold the federal funds rate at 3.50-3.75 percent. With about two weeks left in the quarter, here is what the data show so far.
GDP
The Atlanta Fed GDPNow tracks Q1 2026 at 2.7 percent annualized, moderate growth after a volatile 2025 that ranged from -0.6 to 4.4 percent across quarters. A BD Economics decomposition of GDP into its household-level drivers shows where growth is coming from: productivity is contributing 2.6 percentage points while the employment rate is subtracting 0.4. Growth is coming from output per worker, not more paychecks.
| Indicator | As of | Latest | Year ago | Change |
|---|---|---|---|---|
| GDP nowcast (SAAR) | Mar 13 | 2.7% | — | — |
| CPI, core (YoY) | Feb | 2.5% | 3.1% | -0.7 pp |
| Fed funds rate | Mar 13 | 3.64% | 4.33% | -0.7 pp |
| Nonfarm payrolls, 12-month total | Feb | +156K | +1,072K | -85% |
| Job openings per unemployed | Jan | 0.94 | 1.08 | -0.14 |
| WTI crude oil | Mar 9 | $94.65 | $68.24 | +39% |
| Consumer sentiment (UMich) | Feb | 56.6 | 64.7 | -8.1 |
| Median weekly pay (CPS, real YoY, 3M avg) | Feb | -0.5% | 2.4% | -2.9 pp |
Labor market
Over the past 12 months, the economy added just 156,000 jobs, down from 1.1 million the year before. The job openings-to-unemployed ratio has fallen below 1.0 for the first time since spring 2021 — there are now fewer open positions than people looking for work. Both hiring and layoffs are subdued — a frozen labor market where few people are losing jobs but few are finding new ones.
Prices and wages
Core CPI, which strips out food and energy, fell to 2.5 percent year-over-year in February, the closest to the Fed’s target since spring 2021. But oil has surged 39 percent year-over-year to $95 a barrel, and gas prices rose from under $3.00 to $3.63 in ten weeks. The Cleveland Fed Inflation Nowcasting model projects March CPI at 2.9 percent as the oil shock passes through.
On a three-month average, real median weekly pay is already falling, down about half a percent year-over-year. If March CPI comes in at 2.9 percent, the decline deepens. (BLS did not publish Q4 2025 usual weekly earnings after the October government shutdown canceled that month’s CPS. This estimate from CPS microdata fills a six-month gap in the official series.)
What to watch
Multiple Fed officials have flagged a consumer spending divergence: aggregate numbers hold up because wealthy households spend from equity gains, while lower-income households are pulling back. The saving rate has fallen to half its 40-year average, with spending growth running at twice the pace of income. Consumer spending has been sustained by wealth gains from equity and home prices — the same asset values an oil shock puts at risk. If they fall, there is no fallback: the labor market is frozen, wages are decelerating, and savings are depleted. Productivity is the bright spot. Whether it holds determines the margin.
Sources: Atlanta Fed GDPNow, BLS, BEA, University of Michigan, Cleveland Fed, FRED. See the BD Economics US Chartbook and Indicators page for interactive versions of many of these series.