The Federal Reserve Bank of Philadelphia surveys 37 economists from major banks and universities every quarter to get their best read on where the economy is headed. Their latest forecasts are noticeably more upbeat than they were three months ago.
The economy looks stronger than expected:
Forecasters predict GDP growth of 2.6% this quarter, up from their prior estimate of 1.6%.
For all of 2026, they expect the economy to grow 2.5%, a meaningful upgrade from the previous survey.
The odds of the economy shrinking this quarter dropped to 17.8%, down from 24.0% three months ago.
The job market is holding steady, but hiring is slowing down:
The unemployment rate is expected to stay relatively stable, hovering around 4.4% to 4.5% through the end of 2026.
Employers are expected to add about 83,000 jobs per month right now, but that's forecast to average just 48,500 per month for the full year, well below recent years.
In short, people are keeping their jobs, but companies are not hiring as aggressively as they were.
Prices are still rising, but less quickly:
Inflation is expected to cool throughout 2026, with headline CPI going from 2.7% this quarter down to 2.5% by year-end.
Over the next decade, forecasters expect inflation to average around 2.3% per year, which is close to the Federal Reserve's target.
The long-term picture is steady:
Forecasters expect the economy to grow about 2.1% per year over the next 10 years, unchanged from last year.
Expectations for productivity growth (how much output workers produce per hour) rose to 1.8% annually, up from 1.6%.
Read more via the Philadelphia Fed
The Conference Board's Employment Trends Index increased marginally in February, despite the recent disappointing February Jobs Report.
The ETI, a composite index for payroll employment, increased from 105.18 in January to 105.37 in February.
The "largest positive ETI contributor" for the second straight month was the decline in the share of involuntary part-time workers, down from 19.4% in December to 16.2% in February.
As a composite index, the ETI takes into account eight different components, including (but not limited to) the share of involuntary part-time workers, unemployment claims, job openings, the percentage of consumers who say jobs are "hard to get" and industrial production levels.
Six of the eight components were negative in the most recent index, with just two components contributing positively.
Read more via The Conference Board
U.S. manufacturing expanded for the seventh straight month in February, but the pace of growth was the slowest in that stretch, according to S&P Global's latest Purchasing Managers' Index.
Output and new orders both grew, but more slowly than in January, with companies pointing to high prices, tariffs, and severe weather as the main culprits.
Exports fell for the eighth consecutive month, with tariffs on trade with Canada cited as a primary driver.
Hiring was nearly flat, and cost inflation remained steep, though still below the peaks seen in 2025.
On a positive note, business confidence about the year ahead hit its highest level since June 2025.
Read more via S&P Global
A growing number of economists and labor researchers say the U.S. white-collar job market is in trouble in ways the usual indicators aren't fully capturing.
Back in February, Citrini Research posted (on Substack) a "hypothetical future memo" dated June 30, 2028. The memo describes a "human intelligence displacement spiral," wherein "AI capabilities improved, companies needed fewer workers, white collar layoffs increased, displaced workers spent less, margin pressure pushed firms to invest more in AI, AI capabilities improved…"
Was the Citrini Substack post a highly unlikely and entirely "theoretical scenario"? Or "did the post touch on very real, widespread, yet quiet fears — and lay bare how little choice any of us may have about the AI future?"
White-collar jobs have now contracted for 29 consecutive months. Experts say that's "incredibly unusual" and unprecedented outside of a recession.
The unemployment rate is "masking the problem." Many workers are underemployed, while others are quietly leaving the workforce rather than showing up in unemployment counts.
At several top business schools, the share of graduates still job-hunting three months after graduation has tripled or quadrupled compared to pre-pandemic levels.
Some experts believe AI is already replacing white-collar workers, instead of making existing workers more productive.
But won't AI create new jobs? The job growth that comes as a result of AI could still be years away. And whether humans will be needed to do those new jobs remains to be seen.
Read more via Quartz
Net immigration dropped from 2.7 million in 2024 to 1.3 million in 2025 and is projected to fall to just 321,000 this year, according to a new Deloitte analysis. That's a problem for an economy that was already dealing with a shrinking native-born population and low birth rates.
The effects may already be showing up in hiring: monthly job growth averaged just 29,000 between October and December 2025, down from 166,000 per month in 2024, with the biggest slowdowns in construction, transportation, and manufacturing.
High-skilled immigrants contribute far more than their numbers suggest: they make up 5% of the workforce but generate over 10% of national labor income and account for nearly a third of all U.S. innovation.
Despite common assumptions, research generally finds that immigration doesn't hurt wages or job prospects for native-born workers. If anything, native workers tend to move into higher-skilled roles, raising overall productivity.
Read more via Deloitte
Since the U.S. and Israel began military strikes against Iran, a key global shipping route has been disrupted, triggering a cascade of economic effects that major employers and HR leaders should be watching closely.
Energy prices have surged:
Europe and Asia, which rely more heavily on Middle Eastern oil and gas than the U.S., are expected to feel the price increases even more sharply.
The Strait of Hormuz, through which roughly 20% of the world's oil passes, has been effectively shut down.
How long prices stay elevated depends heavily on how long the conflict lasts, which economists say is difficult to predict.
Food prices could follow:
Up to 30% of the world's fertilizer exports pass through the Strait of Hormuz.
Disruptions in fertilizer shipments are raising costs for farmers, which are likely to be passed on to consumers.
Central banks are in a difficult position:
Higher energy prices push inflation up while also slowing economic growth, leaving central banks with no easy path forward.
What it means for employers:
Sustained energy and food inflation could put upward pressure on wages as workers' purchasing power gets squeezed.
Supply chain costs for businesses with energy-intensive operations or global logistics are likely to rise.
The prospect of higher interest rates for a longer period of time could slow business investment and hiring.
Economists believe the global economy can absorb the shock if the conflict is short-lived.
Read more via Euronews
Tens of thousands of flights have been canceled since the U.S. and Israel began strikes on Iran on Feb. 28, leaving thousands of business travelers stranded across the region.
Many airports in the region are closed, while others are seeing significant cancellations. Many employers have ceased Middle East travel entirely, while others work to ensure the safety of workers stranded in the region.
Experts recommend multinational firms "closely monitor the status of visas and work permits for employees who may need to travel or renew documentation in the coming weeks."
Read more via HR Brew, CNBC
A pro-Iran hacktivist group claimed responsibility for a sweeping cyberattack against Stryker, a Kalamazoo, Michigan-based medical device company with 56,000 employees and $25 billion in annual sales, wiping data from more than 200,000 systems and forcing operations to shut down across 79 countries.
The attack is believed to be one of the first significant Iran-linked strikes on U.S. infrastructure since the U.S. and Israel began bombing Iran last month.
Stryker acknowledged the attack was "severe," affecting all company laptops and systems connected to its network. The company sent more than 5,000 workers home from its Ireland facility and a voicemail at U.S. headquarters indicated a "building emergency."
One piece of equipment disrupted was Lifenet, an IT system emergency responders use to transmit patient data to hospitals. Maryland's emergency medical services agency reported the system was "non-functional in most parts of the state," directing paramedics to relay patient information verbally instead.
Iran has issued warnings that U.S. companies with ties to Israel or companies whose technology "has been used to assist military operations" could be targeted.
Read more via CNN, Krebs on Security, NBC News, Zeroday
A prolonged conflict in the Middle East could push large numbers of people toward Europe, and European governments are already trying to get ahead of it.
The International Organization for Migration's director-general said the longer the conflict lasts, the more likely people are to start moving.
Roughly 83,000 people have been displaced inside Lebanon in recent days.
Experts say European governments could provide financial support to countries in exchange for hosting "displaced communities."
Cyprus, the EU country closest to Lebanon, is reportedly already in active discussions about how to handle an increase in arrivals.
Read more via Luxembourg Times
China: China set its 2025 GDP growth target at 4.5% to 5%, the lowest target the country has established in at least three decades. The downshift signals that the world's second-largest economy is entering a period of slower expansion, which could have broad implications for global trade and supply chains. (The Wall Street Journal)
Germany: Volkswagen reported a 44% drop in net profit in 2025, its worst financial result in years. The automaker announced plans to cut 50,000 jobs in Germany by 2030, significantly expanding a cost-cutting plan that had previously targeted 35,000 positions. (Euronews)
Italy: Female employment in Italy has "grown significantly" over the past decade, from 50.5% in Q3 2015 to 58.3% in Q3 2025, but the country still lags the EU average by more than 13 percentage points. Eurostat data shows a clear pattern: female employment drops sharply after childbirth, particularly for women with lower levels of education, while college-educated women maintain much higher workforce participation even with large families. (L'Unione Sarda)
United Kingdom: UK hiring showed tentative signs of stabilizing in February. Permanent placement declines slowed to their most modest pace since March 2023. Job vacancies have now fallen for 28 consecutive months, though the rate of decline eased to its slowest in nine months. (SIA)
