Economic data and early spring travel heating up, while consumer inflation cooling 

Note: As always, there was a separate Economic Commentary discussing the monthly jobs report published on February 11^th. 

Trend watch

Mid-February brings Valentine’s Day weekend and President’s Day, which is increasingly becoming a getaway opportunity to escape cabin fever. That’s especially true this year given an abnormally cold several weeks for much of the United States. To wit, weekly air passenger counts jumped 8.9% in the past week to 15.5 million, which is a five-week high.

Furthermore, this week also marks the start of spring break season, whereby leisure travel typically climbs for the next month. After a brief plateau in late April/early May, travel usually ramps higher until reaching the traditional peak in late July. In 2025, the peak in weekly air passenger was just over 19.5 million, which was an all-time high.

Our take

Incoming economic data has strengthened of late. In fact, as we show on slide 7 (available to clients in full version), more of the economic data has been surprising to the upside in 2026. Much of the improvement has been business cycle surveys. For instance, we showed here last week that the Institute for Supply Management (ISM) purchasing managers index for manufacturing expanded for the first time in 11 months.

Similarly, on slide 8 (available to clients in full version), we show how one of the key small business surveys —from the National Federation of Independent Businesses (NFIB)—has perked up in the past couple months (although it was basically unchanged in January).

Additionally, the January job gains were stronger‑than‑expected, more than doubling the consensus expectations. Other labor trends also improved in January, as wages, hours worked, and the participation rate all rose, while the unemployment rate ticked lower again.

That said, the January jobs report wasn’t without its own unflattering characteristics. For instance, January’s big gain of 130,000 jobs may have been a catch‑up from the October-November government shutdown disruptions. And much of the recent job growth remains overly concentrated, which is problematic; specifically, the overreliance on health care.

Then there were the massive benchmark revisions, which cut 2025 job growth to a meager 15,000 per month, aligning with a broadly weaker hiring backdrop last year.

Furthermore, the hiring plans component within the aforementioned NFIB survey showed small businesses don’t seem to be inclined to add workers. Multiple other labor market indicators – from continuing claims and ADP to job openings and hiring rates – show that the “low hire/low fire” environment continues.

Ultimately, 2025 was good for gross domestic product (GDP) but had very little job growth. Based on the recent upswing in economic data thus far in 2026, it appears that this dynamic is likely to persist for a while longer.

Bottom line

The U.S. economy remains resilient, but the data is still muddied by the government shutdown, which has created distortions and delays. Accordingly, we probably won’t get a clear read on the economy until early March. Nonetheless, we expect an uptick in U.S. growth to 2.5% in 2026. But the unevenness within the economy makes it feel more like there’s one foot on the gas (fiscal and monetary stimulus) and one foot on the brake (trade and tariff uncertainty, underwhelming job growth).