The February S&P Global US Manufacturing PMI® showed manufacturing activity continued to expand but at its slowest pace in seven months, with the PMI easing to 51.6 from 52.4 in January. Growth in output and new orders moderated due to adverse weather, high prices, and tariff-related pressures. Export demand remained weak, as new export orders fell for the eighth straight month, placing the burden of growth on domestic demand. Manufacturers paused hiring amid concerns about order backlogs and excess capacity. While input costs stayed elevated, competition pushed selling price inflation down to a 14-month low. Despite these challenges, business confidence improved to an eight-month high, supported by plans for new product launches and future expansion. At the same time, firms adopted a more cautious stance in the near term, as uncertainty around trade policy and limited demand visibility continued to weigh on planning decisions.

The U.S. Census Bureau reported advance U.S. retail and food services sales were $733.5 billion in January 2026, down (-0.2%) from the prior month; this follows a virtually unchanged reading for December. Total retail and food services sales were up (+3.2%) year over year, while sales for the November 2025 through January 2026 period increased (+2.9%) from the same period a year earlier. Retail sales are mostly goods and are not adjusted for inflation. Despite the slight monthly decline, nonstore retailers continued to show strong annual growth (+10.9%), helping support year-over-year gains. Excluding sales at motor vehicle and parts dealers, sales were flat for the month. Miscellaneous store retailers (+10.8%) and nonstore retailers (+10.9%) led annual sales increases, while gasoline stations (-3.7%) and furniture & home furnishings stores (-3.5%) posted notable year-over-year declines. Food services & drinking places, the only service category, were down (-0.2%) for the month and up (+3.9%) year over year.

The U.S. Bureau of Labor Statistics reported that total nonfarm payroll employment edged down by 92,000 in February, while the unemployment rate was little changed at 4.4% and the labor force participation rate held steady at 62.0%. A year earlier, the number of long-term unemployed was 1.5 million, compared with 1.9 million in February, accounting for 25.3% of all unemployed workers. February job losses were concentrated in health care (-28,000), partly reflecting strike activity, and information (-11,000), while social assistance (+9,000) posted modest gains. Alongside a -10,000 decline in February, federal government employment has fallen by 330,000, or 11.0%, since peaking in October 2024. Average hourly earnings for all employees on private nonfarm payrolls rose by $0.15 to $37.32, representing a 3.8% increase over the past year, while revisions to December and January combined left employment 69,000 lower than previously reported.