The US economy on October 11, 2026

Business: Business weakens as regional factories split and orders cool

New regional factory data split sharply. Dallas Fed manufacturing production jumped to 29.5 from 16.1, a watch-level 1.4 z-score and a clear expansion reading. Richmond Fed manufacturing composite fell to -2.0 from 4.0, crossing below zero into contraction.

Equipment demand also cooled at the margin. Core capital goods orders’ advance three-month annualised rate eased to 16.425 from 17.923, though higher still reads as firmer business investment. Durable goods orders in the advance report slipped to -0.017 from 0.859 month on month. Core capital goods orders (nondefense ex aircraft) remains on watch at 16.483.

Overall, Business moved to weaker from stable, with the score falling to -0.23 from 0.03. Philadelphia Fed manufacturing general activity eased to 37.8 from 47.4 but remained well above the contraction threshold of 0 and on watch with a 1.45 z-score.

Energy: Energy & Commodities turns rising as oil and gasoline remain elevated

Energy & Commodities shifted from falling to rising. Brent crude oil remains an alert at 125.44 dollars per barrel (z-score 2.81), little changed from 125.51; its rise reads as global inflation. Regular gasoline retail price is also an alert at 4.354 dollars per gallon, down from 4.465, but still reads as a consumer squeeze.

Commercial crude oil inventories declined to 707117.0 from 711087.0 thousand barrels; a build reads as weak demand. WTI crude oil is 96.24 dollars per barrel, up from 96.13 and at watch. Global price of copper rose to 38.608 from 37.793 year on year, a reading associated with global growth. Henry Hub natural gas is calm at 3.03.

Financial conditions: Financial conditions stay loose, though the easing pace has slowed

{'paragraph': 'Financial Conditions remain in a looser state, but the pillar score moved to -0.22 from -0.63, a milder reading than last period even as the broad direction holds. All member indicators are calm, none firing threshold signals this cycle.'}

{'paragraph': 'The Chicago Fed National Financial Conditions Index sits at -0.494, below zero and little changed from -0.51 previously, consistent with looser-than-average conditions. The Adjusted NFCI reads -0.504 versus -0.524 prior, still indicating conditions looser than the cycle would warrant. The St. Louis Fed financial stress index rose to -0.468 from -0.809, a smaller stress discount than before.'}

{'paragraph': 'Banks tightening C&I lending standards (large firms) fell to 0.0 from 8.1 previously and 9.5 a year ago, suggesting lending standards have stopped tightening at the margin. Total bank credit grew 5.996% year-on-year, close to the prior 6.019% and up from 5.149% a year ago, pointing to steady credit expansion.'}

{'paragraph': 'The broad trade-weighted dollar index rose 0.793% year-on-year versus 1.363% prior, a smaller dollar gain that eases one source of global tightening. NFCI leverage sub-index ticked up to 0.137 from 0.128, the only sub-index drifting toward more leverage-building, though still within calm territory. The Chicago Fed NFCI update is due October 15.'}

Government finances: Debt and interest outlays remain fiscal watchpoints

Total public debt outstanding (Debt to the Penny) rose to $40,305,316,210,829.72 from $40,284,036,147,367.19; its 1.8 z-score remains at watch. Since higher debt reads as supply pressure, the increase keeps that pressure in focus. Federal interest outlays also rose to 1279.734 from 1252.858 billion dollars annualized, with a 1.95 z-score at watch; higher outlays read as fiscal strain.

Federal surplus or deficit (monthly) was -166796.952 million dollars, less negative than -432285.728 previously, so the monthly deficit narrowed; widening deficits are the impulse-and-supply signal. Withheld income and employment taxes (rolling), on a rolling twenty-day year-on-year basis, slowed to 4.04% from 6.918%, a downshift that reads as earnings weakness. The Fiscal pillar remains expanding, unchanged from the prior state.

Growth: Growth improves to stable as the nowcast firms

The Growth pillar moved from weaker to stable. Real GDP growth eased to 2.22% quarter-on-quarter annualised from 2.492%, while the NY Fed Staff Nowcast rose to 2.65% from 2.46%, leaving the current-growth signal firmer despite softer reported GDP.

Real personal consumption expenditures growth picked up to 2.574% year-on-year from 2.251%. Industrial production and Retail sales also strengthened year-on-year, while the Chicago Fed National Activity Index and Capacity utilization remained calm. The next Census retail release is upcoming.

Households: Consumer weakens as financial expectations fall to watch

The Consumer pillar shifted from stable to weaker. NY Fed Survey of Consumer Expectations fell to 24.068 from 25.865; higher readings indicate greater confidence. It is on watch at a z-score of -1.27, below its 10-year mean of 33.114.

Real disposable personal income growth slowed to 1.301 year-on-year from 1.494, while Personal income growth eased to 4.272 from 4.462. The Personal saving rate fell to 4.1 from 4.6, consistent with a more stretched consumer; Credit card delinquency rate edged down to 2.85 from 2.91, a modest offset.

Housing: Housing cools to stable as mortgage rates rise

Housing shifted from stronger to stable, with its score easing to 0.14 from 0.29. The new 30-year fixed mortgage rate reading rose to 7.4% from 7.28%, worsening affordability; it is on watch at 1.6 standard deviations above its ten-year mean.

FHFA purchase-only house price index (SA) growth accelerated to 2.572% year-on-year from 2.349%, but remains below 2.625% a year earlier and is on watch. Housing starts eased to 1275 from 1309, while new home sales rose to 684 from 643; months supply remains 8.5.

Interest rates: Real yields and longer-term borrowing rates edge higher

Rates & Monetary remains tighter, with the score rising to 0.36 from 0.33. The 10-year TIPS real yield increased to 2.91 from 2.87 and the 10-year Treasury yield to 5.24 from 5.22; both are on watch against their ten-year windows. Higher real yields tighten real conditions, while higher Treasury yields tighten borrowing conditions.

The 5-year TIPS real yield also rose to 2.68 from 2.62, and the 2-year Treasury yield to 4.8 from 4.75; both are on watch. The Effective federal funds rate was unchanged at 3.88, while the 10-year minus 2-year spread narrowed to 0.44 from 0.47 but stayed above 0.

Jobs: Labor holds stronger, with participation and quits still on watch

Labor remains stronger, but its score eased to 0.23 from 0.33. Labor force participation rose to 61.8% from 61.6%, yet remains on watch; the JOLTS quits rate was unchanged at 1.9% and is also on watch, consistent with softer worker confidence.

The latest claims data were firmer: the four-week average of Initial jobless claims fell to 198,000 from 200,500, and Continuing jobless claims declined to 1,711,000 from 1,723,250. Nonfarm payrolls slowed to 29 from 133, while the unemployment rate edged up to 4.2% from 4.1%.

Average hourly earnings growth eased to 3.025% year-on-year from 3.113%. Overall, the claims and payroll picture is mixed, while the two watch signals point to some cooling in labor supply and worker confidence.

Leading indicators: Leading & Composite turns stronger, though weekly momentum softens

The pillar shifted from weaker to stronger. CFNAI 3-month moving average improved from -0.01 to 0.01, and ADS business conditions index edged up from -0.255 to -0.25; ADS remains below trend.

Among the new data, Weekly Economic Index eased from 2.97 to 2.71; its down direction reads as weakening. NY Fed yield-curve recession probability (12 months ahead) fell from 27.42 to 26.51, also below its year-ago 42.05, easing the recession signal.

Prices: Inflation stabilizes as import prices and consumer expectations rise

The Inflation pillar shifted from falling to stable. The Import price index is the clearest watch signal: its year-on-year increase rose to 6.95 from 6.091, pointing to stronger imported inflation. PPI final demand also accelerated year-on-year, to 5.414 from 4.804.

Core PCE price index edged up year-on-year to 3.008 from 2.983, while Core CPI eased to 2.446 from 2.467 and Trimmed-mean PCE inflation (12-month) fell to 2.19 from 2.28. The NY Fed Survey of Consumer Expectations median 1-year inflation expectation rose to 3.903 from 3.579; market breakevens edged lower. CPI is due October 14.

Trade: Trade deficit widens as import growth accelerates

Trade balance goods and services widened to -105572.0 from -92826.0, an alert at -2.59 on the ten-year z-score. More negative means a larger drag on GDP. Its prior reading was revised from -88576.0 to -92826.0, deepening that drag.

Imports of goods and services rose 22.176 year-on-year, up from 12.336, a watch signal and a read on domestic demand; the prior level was revised from 399299.0 to 403550.0. Exports of goods and services also accelerated to 10.691 year-on-year from 9.343, pointing to stronger external demand. Trade remains weaker, though its score improved from -0.67 to -0.44.