Analysis
February 26, 2026
Doderer on economy: A narrow reacceleration and the offramp not taken
Written by Daniel Doderer
Over the last month, incoming macro data was encouraging but did not signal a wholesale change in trajectory from uneven expansion within industrials.
- ISM Manufacturing PMI rebounded sharply in January to 52.6 (up 4.7 points), moving back into expansion after 10 consecutive months in contraction. New Orders, Backlogs, and Production were all in expansion territory.
- Total construction spending rose 0.5% month over month (m/m), driven by a 1.3% increase in residential activity, while nonresidential spending slipped 0.2% – housing remains a relative bright spot.
- Auto sales declined to 15.2 million SAAR in January, down 1.2 million (annualized) from December – the lowest level since December 2022.
- Headline PCE Price Index accelerated to 2.9% year over year (y/y) and Core PCE to 3.0% y/y, with both rising 0.4% in the month.
- Nonfarm payroll growth jumped 130k and unemployment dipped to 4.3%, signaling continued expansion in the labor market. As a reminder, the new breakeven range is ~20-50k.
