The US economy on October 24, 2026

Business: Business stable as regional manufacturing surveys strengthen

Business remains stable versus the prior state. Empire State manufacturing general business conditions rose from 7.6 to 25.5, while Dallas Fed manufacturing production increased from 16.1 to 29.5; both are in watch territory and their positive readings indicate expansion. Philadelphia Fed manufacturing general activity eased from 37.8 to 20.9 but remains above zero.

Core capital goods orders (nondefense ex aircraft) remained strong at 16.483 on a three-month annualised basis, down from 18.109; the watch signal highlights continued business investment momentum. Total business inventories rose from 4.044 to 4.583 year-on-year, a faster pace that can indicate inventory overhang. Richmond Fed manufacturing composite slipped from 4.0 to -2.0, crossing into contraction.

Energy: Oil prices ease, but crude remains an inflation pressure

Brent crude oil eased to 115.22 from 118.82 and WTI crude oil to 107.89 from 110.01; both remain alerts, with z-scores of 2.23 and 2.27. Their elevated levels still read as global inflation pressure and a tax on consumers. The WTI revision signal also flags a downward revision from 98.73 to 94.99.

Regular gasoline retail price slipped to 4.284 from 4.331, but remains on watch and reads as a consumer squeeze. Commercial crude oil inventories fell to 695200.0 from 698560.0; since a build reads as weak demand, the latest move is not that signal. Global price of copper, on a year-on-year basis, eased to 44.806 from 48.175, while still reading as a growth indicator. Henry Hub natural gas is calm. The pillar remains rising, unchanged from the prior state.

Financial conditions: Financial conditions remain stable; leverage edges higher

The pillar remains stable. The Chicago Fed National Financial Conditions Index rose to -0.496 from -0.502, a slight move toward tighter conditions, but remains below 0, which indicates tighter-than-average conditions. Adjusted NFCI also rose to -0.518 from -0.524, while remaining below 0, its threshold for tight conditions relative to the cycle.

The NFCI leverage sub-index increased to 0.215 from 0.207, indicating more leverage building, though its state remains calm. The St. Louis Fed financial stress index moved up to -0.633 from -0.721, but remains below 0, the threshold for above-average stress. Banks tightening C&I lending standards (large firms) fell to 0.0 from 8.1, while Total bank credit year-on-year growth increased to 6.406 from 6.211, consistent with continued credit expansion.

Government finances: Fiscal stable, with debt and interest outlays still on watch

The Fiscal pillar remains stable, but Federal interest outlays rose to 1279.734 from 1252.858 and are on watch (z-score 1.95), consistent with greater fiscal strain. Total public debt outstanding also rose, to 40444342709389.15 from 40413639012305.97, and remains on watch (z-score 1.8), signaling supply pressure.

Treasury General Account closing balance increased to 961759.0 from 945153.0; unlike a drawdown, that is not a liquidity-add signal. It is flagged watch, with low confidence. Withheld income and employment taxes (rolling), measured as the rolling twenty-day total versus a year earlier, eased to 2.327 from 9.343, a weaker earnings read. The pillar state is unchanged from the prior day.

Growth: Growth stable as factory and consumer readings firm

The NY Fed Staff Nowcast was updated on 2026-10-23 and held at 2.67, offering no change in the current growth estimate. Real GDP’s quarter-on-quarter annualised rate eased to 2.22 from 2.492, a slower pace but still positive.

Industrial production’s year-on-year growth rose to 2.245 from 1.615. Retail sales and real personal consumption expenditures also strengthened year on year, to 6.288 from 5.556 and 2.574 from 2.251, respectively. The Growth pillar remains stable; the Chicago Fed National Activity Index eased to -0.04 from 0.08.

Households: Consumer expectations weaken; income growth and saving also ease

The NY Fed Survey of Consumer Expectations, households expecting to be better off in a year fell to 24.068 from 25.865, leaving it on watch at -1.27 z-score, below its 10-year mean of 33.114. The Consumer pillar remains weaker, unchanged from the prior state.

Real disposable personal income growth slowed year-on-year to 1.301 from 1.494, while the Personal saving rate fell to 4.1 from 4.6, pointing to less income momentum and a more stretched consumer. Credit card delinquency rate eased to 2.85 from 2.91, a modest offset to those softer readings.

Housing: Mortgage rates ease slightly; housing starts revision draws attention

The new 30-year fixed mortgage rate reading eased to 7.32% from 7.4%, a modest affordability improvement, but remains in watch territory at 1.54 standard deviations above its ten-year mean. Housing starts were 1221.0 thousand annualized, down from 1288.0; a revision signal also reports an earlier estimate revised from 1309.0 to 1369.0.

FHFA purchase-only house price growth accelerated to 2.572 year-on-year from 2.349, though the reading remains 1.01 standard deviations below its ten-year mean. The Housing pillar remains stable, unchanged from the prior state. Housing starts are next scheduled for release on 2026-10-27.

Interest rates: Real yields and Treasury rates remain on watch

The 10-year TIPS real yield rose to 2.66% from 2.64%, and the 10-year Treasury yield to 5.0% from 4.96%; both remain on watch. Their z-scores are 1.73 and 1.68, respectively, signaling elevated levels against the ten-year window. Higher real yields mean tighter real conditions, while higher Treasury yields tighten borrowing conditions.

The pillar remains tighter, though its score eased to 0.46 from 0.51. The Effective federal funds rate held at 3.88%, and the 10-year minus 2-year spread was unchanged at 0.31%, above the inversion threshold. Reserve balances with Federal Reserve Banks fell to 2962607.0 from 3022140.0, pointing to scarcer liquidity.

Jobs: Claims ease, while labor-force participation and quits remain on watch

New Initial jobless claims data improved: the four-week average fell to 197750 from 198750; higher claims signal weaker labor. Continuing jobless claims edged up to 1711000 from 1707000, a less favorable counterpoint.

Labor remains stronger, unchanged from the prior state. Labor force participation rate rose to 61.8 from 61.6 but remains on watch and below its 10-year mean of 62.418. JOLTS quits rate was unchanged at 1.9 and remains on watch, consistent with weaker worker confidence.

Leading indicators: Weekly activity firms; leading pillar remains stronger

The Leading & Composite pillar remains stronger, with its score unchanged at 0.47. The new Weekly Economic Index reading rose to 3.33 from 3.02; because lower readings signal weakening, the move points to firmer activity.

The NY Fed yield-curve recession probability eased to 26.51 from 27.42. The CFNAI 3-month moving average edged up to 0.01 from -0.01 and remains calm. The next CFNAI release is due 2026-10-26.

Prices: Import prices accelerate as consumer inflation edges higher

Import price index is the standout: its year-on-year increase rose to 8.097 from 6.738, triggering a watch signal at a 1.33 z-score. That points to stronger imported inflation and is a notable shift in the pipeline.

CPI all items year-on-year rose to 3.717 from 3.353, while Core CPI increased to 2.566 from 2.446 and Core PCE price index to 3.008 from 2.983. The Inflation pillar remains stable.

New readings showed 10-year breakeven inflation at 2.34, 5-year breakeven inflation at 2.48, and 5-year, 5-year forward inflation expectation at 2.2; each was slightly higher than its prior reading.

Trade: Trade deficit widens as import growth accelerates

Trade balance goods and services deteriorated to -105572.0 from -92826.0 million dollars, an unusually negative reading (z-score -2.59) and a larger drag on GDP. Imports of goods and services rose to 22.176% year-on-year from 12.336%, signaling stronger domestic demand and moving to watch.

Exports of goods and services also strengthened to 10.691% year-on-year from 9.343%, a calm signal of firmer external demand. Current account balance became more negative, to -246023.0 from -212597.0 million dollars, indicating a greater financing need, though it remains calm. The Trade pillar remains weaker, unchanged from the prior state.