Not Spending: What We Learned During the Week of March 9 – 13

Consumers were hesitant to spend in early 2026. Here are five things we learned from U.S. economic data released during the week ending March 13. 

Consumer spending, but not inflation, remained weak in January. Real Personal Consumption Expenditures (PCE) grew by a seasonally adjusted 0.1 percent, matching the Bureau of Economic Analysis measure’s December gain. Goods spending fell 0.4 percent, with the entire drop coming from durable goods (-1.1 percent). Service expenditures rose by 0.3 percent. Without adjusting for inflation, nominal PCE jumped 0.4 percent, supported by gains in nominal personal income (0.4 percent) and disposable income (0.9 percent). Real disposable income increased by 0.7 percent. The savings rate added half a percentage point, reaching +4.5 percent. Over the past year, real PCE has increased by 2.4 percent, while real disposable income has grown by 1.8 percent. The PCE price index rose by 0.3 percent, with the core index (excluding energy and food) up 0.4 percent. Year-over-year, these two inflation measures increased by 2.8 percent and 3.1 percent, respectively.

The late-2025 U.S. economic growth was slower than previously believed. The Bureau of Economic Analysis’s second estimate of 2025 Q4 Gross Domestic Product (GDP) shows the U.S. economy growing by 0.7 percent on a seasonally adjusted annualized basis. This was a downward revision from the previously reported Q4 growth rate of 1.4 percent, resulting in an overall 2025 growth of 2.1 percent. (In 2023 and 2024, the U.S. economy expanded by 2.9 percent and 2.8 percent, respectively.) The downward revision was the result of lower-than previously believed levels of exports, consumer spending, government spending, and investment, along with an upward adjustment in imports. The BEA will issue another revision of its 2025 Q4 GDP report in early April.

Inflation accelerated slightly in February. The Consumer Price Index increased by a seasonally adjusted 0.3 percent, following a 0.2 percent rise in the previous month. Inflation in food (+0.4 percent) and energy (+0.6 percent) both exceeded that of the headline index (note that the latter does not reflect the recent surge in gasoline prices resulting from the military actions against Iran). Excluding both, core CPI rose 0.2 percent (down from January’s 0.3 percent increase). Prices increased for apparel (+1.3 percent), medical care services (+0.6 percent), shelter (+0.2 percent), and transportation services (+0.2 percent). Prices remained steady for medical care commodities and new vehicles, while they fell 0.4 percent for used cars and trucks. The Bureau of Labor Statistics reports CPI has risen 2.4 percent over the past year, with the core index up 2.5 percent.

Existing home sales inched up in February. Sales of previously-owned homes grew 1.7 percent to a seasonally adjusted annualized rate (SAAR) of 4.090 million units. The National Association of Realtors measure was 1.4 percent below its year-ago level. Sales rose in three of four Census regions during the month, with the Northeast being the negative outlier. Conversely, sales were down year-over-year in three of four Census regions, with the South being the positive exception. Inventories of unsold homes increased by 2.4 percent to 1.29 million units (+4.9 percent compared to February 2025), representing a 3.8-month supply. The median sales price of $398,000 was up just 0.3 percent from a year earlier.

Consumer sentiment slipped in early March. The University of Michigan Index of Consumer Sentiment lost 1.1 points to a seasonally adjusted 55.5 (1966Q1=100). The index was 2.6 percent below year-ago levels. The current conditions index increased by 1.2 points to 57.8 (-9.4 percent compared to March 2025), while the expectations measure dropped by 2.5 points to 56.6 (+2.9 percent versus March 2025). All three measures declined among consumers who completed the survey after the start of military action in Iran. One-year inflation expectations stayed high at 3.4 percent, with longer-term inflation expected at 3.2 percent.

Other U.S. economic data released over the past week:

• Jobless Claims (Week ending March 7, 2026, First-Time Claims, seasonally adjusted): 213,000 (-1,000 vs. the previous week, -10,000 vs. the same week a year earlier). 4-week moving average: 212,000 (-7.2% vs. the same week a year earlier).
• Job Openings and Labor Turnover (January 2026, Job Openings, seasonally adjusted): 6.946 million (+394,000 vs. December 2025; -6.5% vs. January 2025)
• Housing Starts (January 2026, Privately-Owned Housing Starts, seasonally adjusted annualized rate): 1.487 million (+7.2% vs. December 2025; +9.5% vs. January 2025).
• International Trade (January 2026, Goods and Services Trade Deficit, seasonally adjusted): -$54.5 billion (-25.2% vs. December 2025; -57.6% vs. January 2025).
• Small Business Optimism Index (February 2026, Index (1986=100), seasonally adjusted): 98.8 (-0.5 vs. January 2026; -2.1 vs. February 2026).
• Monthly Treasury Statement (February 2026, Federal Government Budget Deficit Year-to-Date 2026): -$1.004 trillion (-12.4% vs. Year-to-Date FY2025).

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