The economic shock of Covid-19 can be seen in the charts. The potential for a severe recession was obvious. Quick, decisive action from the Federal Reserve and Congress stimulated the economy. They overdid it a bit, resulting in inflation, but that’s a small price to pay for the robust recovery.
Some economists predicted that the Fed’s increase in the fed funds rate to tamp down inflation would lead to recession. In fact, the Fed guided the economy into a soft landing with low unemployment and good economic growth.
https://www.wsj.com/economy/federal-reserve-soft-landing-inflation-5dd00d29?mod=hp_lead_pos1
The Economy May Have Stuck the Soft Landing. Nobody Wants to Jinx It.
Inflation is easing, jobs are holding up, and growth is solid. But declarations of victory feel premature.
By Nick Timiraos, The Wall Street Journal, Feb. 14, 2026
The vital signs of the American economy are pointing in the same, favorable direction more convincingly than at any point since before the pandemic. Inflation is falling. The labor market is holding. Growth has been solid.
It is a snapshot, not a verdict—but it is the closest the economy has come to achieving a soft landing, a moderation in inflation without recession…
Friday’s inflation report showed so-called core prices, which strip out volatile food and energy costs, rose 2.5% in January from a year earlier—the lowest since the pandemic price surge began in 2021…
Meanwhile, separate data Wednesday showed the unemployment rate ticked down to 4.3% in January, with employers adding a larger-than-anticipated 130,000 jobs…
[But not so fast…that’s not the real number since it includes “birth-death” adjustment …]
Annual revisions showed the economy added an average of 15,000 jobs a month in all of 2025, lower than in almost any year outside of recessions since World War II. Job growth has been narrowly concentrated in healthcare and education…[end quote]
The Labor Department requires several months to track down all the real numbers so this is just a snapshot subject to later revision. Because employment has large seasonal swings, the Labor Department reports both Seasonally Adjusted (SA) and non-Seasonally Adjusted (NSA = actual raw numbers). For a worker seeking a job, the NSA is the most relevant since that’s what tells us how many real people were working.
In accordance with annual practice, the establishment survey data released today have been
benchmarked to reflect comprehensive counts of payroll jobs for March 2025. These counts are
derived principally from the Quarterly Census of Employment and Wages (QCEW), which counts
jobs covered by the Unemployment Insurance (UI) tax system. The benchmark process results in
revisions to not seasonally adjusted data from April 2024 forward. Seasonally adjusted data
from January 2021 forward are subject to revision. In addition, data for some series prior to
2021, both seasonally adjusted and unadjusted, incorporate other revisions.
The seasonally adjusted total nonfarm employment level for March 2025 was revised downward by
898,000. On a not seasonally adjusted basis, the total nonfarm employment level for March 2025
was revised downward by 862,000, or -0.5 percent. Not seasonally adjusted, the absolute
average benchmark revision over the prior 10 years is 0.2 percent.
The change in total nonfarm employment for 2025 was revised from +584,000 to +181,000
(seasonally adjusted). Table A presents revised total nonfarm employment data on a
seasonally adjusted basis from January to December 2025. [end quote]
For a job-seeking worker, the ratio of job openings to unemployed job seekers is very important. The ratio hit 2.0 in 2022 when there was a post-pandemic labor shortage and it was very easy to find a job. Now it’s less than 1.0 which means there are more unemployed job-seekers than jobs. Polls show that workers find it hard to find a job. It’s especially hard for new entrants to the job market.
The Atlanta Fed’s GDPNow forecasting model provides a “nowcast” of the official estimate prior to its release by estimating real GDP growth using a methodology similar to the one used by the US Bureau of Economic Analysis. The latest GDPNow Estimate for 2025:Q4 is 3.7%. This is strong but believable growth. The estimate of the Nowcast in past months has been much higher than the “Blue Chip consensus” but they are now converging.
There was a surge in Net Exports in January 2026 that boosted the Nowcast. But that surge in exports was mostly gold sent overseas.
Exports are at a record high.
But imports are higher than exports leading to a severe trade deficit. The spike down in 2024 was from imports brought in to front-run the Trump tariffs.
It’s been almost a year since Trump’s tariffs were imposed. Many companies that didn’t raise prices on existing inventory in 2024 intend to raise prices in 2025. Combined with the extra money in consumer pockets from tax refunds that will put upward pressure on prices.
The price of a stock, like any other commodity, is driven by supply and demand. The supply of listed stocks has declined as many previously public companies were bought by private equity and de-listed. Meanwhile, demand has soared as financial conditions are very loose and a new generation, locked out of buying homes, has invested in the stock market, driving P/E ratios to bubble heights.
https://www.wsj.com/personal-finance/gen-z-investments-home-ownership-ec0bbe98?mod=hp_lead_pos3
Gen Z, Locked Out of Home Buying, Puts Its Money in the Market
The share of young people transferring funds to investment accounts has climbed steeply over a decade
By Rachel Wolfe, The Wall Street Journal, Updated Feb. 15, 2026
A generation of young people locked out of homeownership has found another way to build wealth: putting money into the stock market.
The share of people 25 to 39 years old making annual transfers to investment accounts more than tripled between 2013 and 2023 to 14.4 percent, outpacing increases for those 40 and over, according to data from the JPMorgan Chase Institute. The share of 26-year-olds who transferred funds to investment accounts since turning 22 shot up from 8% in 2015 to 40% as of May 2025. The numbers don’t include people investing in 401(k)s… [end quote]
The 2026 stock market resembles 1999 in many ways. Not least because of “soonicorns.”
https://www.nytimes.com/2026/02/15/business/soonicorn-billion-dollar-startups.html
Will 2026 Be the Year of the ‘Soonicorn’?
As venture capital funding pours into start-ups large and small, more firms are pitching themselves as the next big thing.
By Lora Kelley, The New York Times, Feb. 15, 2026
Once upon a time, becoming a “unicorn” — a private start-up worth more than a billion dollars — was a founder’s dream. …
But today, more than a thousand of them exist, and the world of ’corns has broadened to include “decacorns,” private companies valued at $10 billion or more; and “hectocorns,” worth more than $100 billion. There’s even a word for start-ups that pitch themselves as poised to become the next crop of unicorns: “soonicorns.”
These companies, backed by venture capital and worth $500 million to $999 million at a post-money valuation, can tell us a lot about the start-up world and where it’s heading…
There are now “dramatically more soonicorns in the United States than 10 years ago,” he added, noting that, by the end of last year, more than 2,000 companies had reached the status. … the artificial intelligence craze has lowered the barriers to receiving funding at heady valuations. Investors are pouring capital into new projects, making it relatively easy to start a company (especially compared with the fallow days of the early 2020s)…
The mega start-ups Anthropic, OpenAI and SpaceX (all hectocorns) are reportedly taking steps to go public this year… [end quote]
Can you say “dot-com”?
The “soonicorns” are owned by private equity and not listed on the markets yet. But the froth and excitement are definitely there.
The stock market has become more skittish. The SPX has plateaued and NAZ has dropped recently. VIX is climbing. The Fear & Greed Index is in Fear. The trade is risk-off as both SPX and junk bonds are falling relative to Treasuries.
The Treasury yield curve has fallen along its entire duration. Gold and silver fell out of their speculative peak but gold is now climbing again. Copper is stable. Oil is climbing. Bitcoin is still crawling along the floor.
The METAR for next week is partly cloudy with some unsettled weather. Overall conditions are good but the markets are in a metastable state due to overvaluation.
Wendy