From the Desk - Economic Commentary
Brandon Casey, Member Strategies - 4/30/2026
U.S. equity markets are mixed Thursday as investors digest corporate earnings from some of the largest tech companies. Stocks are coming off also coming off a mixed session on Wednesday. The Fed voted to keep rates unchanged yesterday, but with a vote of 8-4, it was the most dissenting votes since 1992. It was the lasts meeting as chair for Jerome Powell, who said he would stay on as a governor.
The U.S. economy showed moderate growth in the first quarter of 2026, with GDP increasing at an annualized rate of 2.0%, slightly below the 2.2% consensus expectation but marking a rebound from the 0.5% gain in Q4 2025. Growth was supported by investment, exports, consumer and government spending, while a rise in imports acted as a drag. Real final sales to private domestic purchasers rose 2.5%, underscoring underlying domestic demand. Inflation remained elevated, with the PCE price index up 4.5% over the last year and core PCE climbing 4.3% year-over-year.
In March, the PCE price index rose 0.7% month-over-month and 3.5% year-over-year, aligning with consensus forecasts. It was the highest annual reading since August 2023. Core PCE increased 0.3% for the month and 3.2% over the last 12 months, also in line with forecasts, but the highest annual reading since November 2023.
Personal spending increased by 0.9% in March, outpacing the 0.6% gain in February and matching expectations. Personal income rose 0.6%, doubling expectations after being unchanged in February. The personal saving rate edged down to 3.6%.
Initial jobless claims fell to 189,000 for the week ending April 25, significantly below the consensus estimate of about 213,000 and the lowest level since 1969. Initial claims were at 215,000 the previous week. Continuing claims for the week ending April 18 dropped 23,000 to 1.785 million.
The Employment Cost Index rose 0.9% during the first quarter, just above the 0.8% consensus. The rise was driven by a 0.8% increase in wages and a 1.2% growth in benefits. The index was up 3.4% over the last year.
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