01/23/26
Two economic data drops:
- s&p global flash pmi for January 2026
- Survey of consumers for January 2026
S&P Flash PMI U.S.:
overall the economy is expanding but not super strongly. Growth is slower than the 2nd half of 2025 (so we seen some decline).
- Services @ 8mo low but still growing (services make up 70% of gdp & 80% of jobs generally; carries more weight on economy than manufacturing)
- Manufacturing jumped to faster growth output in 5 months but TARIFF driven costs remain a pressure.
- Jobs flat due to weak demand, costs trending higher (TARIFFS), & political uncertainty. There are also examples of struggle to find workers to hire too.
- Inflation in manufacturing due to tariffs & selling prices rising @ highest rate in 3 years.
Survey of consumers:
There was overall improvement across the board (income groups, age, education, & political affiliation). National sentiment over 20% lower than a year ago though (can change fast depending on tariffs). Inflation expectations remain in a range. 1-year out down to 4%. Consumers still feel pressured by high prices and a weakening labor market outlook (TARIFFS).
****** reading this I keep seeing lingering effects of tariffs. We keep saying that tariffs are expected to be lower or even disappear deeper into 2026. That would lead to lower price pressures, uncertainty, and as a result maybe a rebound in the labor market. Honestly reading these two reports make me feel bullish about the economy because of:
- Lower expected tariffs in 2026 due to Supreme Court hearing (tariffs paid largely by Americans: hidden tax) & the taco negotiation tactics.
- The feds 3 cuts in 2025 (works through the economy with a lag so they should begin to start kicking in 2026)
Assuming those two reasons both of these reports should reflect more positively in future based on thesis. DOES NOT SUPPORT FURTHER CUTS AT THIS POINT. 2026 in Joel’s opinion will have 1 or less cuts from the federal reserve. ******