How Is the Economy Doing Right Now?

The U.S. lost jobs in February while inflation remains elevated.

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Updated on March 31. Updated on March 31.

What NerdWallet's economist is watching this week

Here’s what NerdWallet’s senior economist Elizabeth Renter will be watching for in economic news and data for the week of March 30. Here’s what NerdWallet’s senior economist Elizabeth Renter will be watching for in economic news and data for the week of March 30. This week is jobs week, when we get two monthly labor market data sets from the BLS. February’s data showed the economy lost a significant number of jobs, after months of slow but steady continued growth. If the March data released in a week tells a similar story, it will spell trouble. The economy can only post losses like that for so long before we see the unemployment rate spike. But even if the data shows a more subtle decrease or zero job growth, it’s cause for concern. It’s true that as the number of people in the labor force decreases — whether through aging out or restrictive immigration policies — we can add fewer jobs each month without the unemployment rate skyrocketing. This “breakeven rate,” or the number of jobs the economy needs to add to keep the unemployment rate steady, has undoubtedly risen. But continued stagnation or contraction in the labor market will eventually lead to higher jobless rates. That’s partially because some of the destruction of labor market activity can be attributed to labor supply (immigration and aging demographics), but some is undoubtedly due to waning labor demand. will When employers are uncertain or pessimistic about the future of their business, they’ll pull back on hiring or even start cutting jobs. This is where the lackluster job growth begins to signal a more pressing economic concern. While I don’t anticipate this week’s jobs data will be as dramatic as last month’s, I think it will provide more evidence that the labor market is currently on a troubling trajectory. Upcoming data releases: Upcoming data releases: Tues., March 31: Job Openings and Labor Turnover (JOLTS), BLS - The layoff rate in this report is where I’ll be looking for signs of serious trouble. Unexciting hiring and quits rates have been standard for several months, but a rise in layoffs would signal employers taking more serious action. Job Openings and Labor Turnover (JOLTS), BLS - Consumer Confidence, Conference Board - This release of consumer sentiment data is heavily focused on labor market attitudes, and therefore worth a continued focus, especially this week. Consumer Confidence, Conference Board - Wed., April 1: Retail trade, U.S. Census - We keep looking for a pull-back in consumer spending — the typical natural progression of stunted consumer economic sentiment. December and January data likely signaled the beginning of this tightening of household budgets, but this release of February data could cement these previous figures as a true trend. Retail trade, U.S. Census - Fri., April 3: Employment situation (“jobs report”), BLS - Best for last. This jobs report is going to be closely watched for many reasons. I anticipate we’ll see the -92k figure from February revised up a bit, and March won’t be quite as bleak. But the headline figure could be tens of thousands higher, and still not good news. Employment situation (“jobs report”), BLS - Publishing this week from the NerdWallet studies team: Publishing this week from the NerdWallet studies team: Wed. April 1: Subscription audit how-to - More than half (55%) of Americans plan to “significantly decrease” the number of subscriptions they have this year in order to save money. Studies writer Erin El Issa walks through how she slashed subscriptions in this upcoming first-person story. Subscription audit how-to - ICYMI: ICYMI: 2026 Summer Travel Study - About half of Americans plan to travel this summer, but many are still paying off last year’s travel debt. This analysis is chock full of travel spending stats, including how much people plan to spend and how they’ll pay for it. 2026 Summer Travel Study -

What’s going on with tariffs?

What’s going on with tariffs? Since entering office, President Donald Trump has announced sweeping tariffs affecting virtually all U.S. trade partners. On Feb. 20, the Supreme Court issued its long-awaited ruling on tariffs. The upshot: Trump’s reciprocal tariffs have been struck down, injecting fresh uncertainty for consumers. Get all the details on the ruling here. We’ll continue tracking the latest tariff news here. The state of the U.S. economy is showing signs of weakening. The economy is expanding again after a dip in Q1 2025, but Q4 2025 growth was lower than anticipated. The labor market is stagnant and inflation is below its peak but stubborn. The Federal Reserve looks at several economic indicators — along with the stock market — to form a better picture of the economy and make decisions on interest rates. » Stay informed: Stay informed: Check out NerdWallet's news hub for all the latest. Subscribe to one of NerdWallet's free newsletters. What NerdWallet's economist is watching this week What’s going on with tariffs? Is the U.S. in a recession? Is the U.S. economy growing? What is the U.S. unemployment rate? How fast are wages growing? Is inflation going down? Is inflation going down? What’s happening with gas prices? How much is the U.S. dollar worth now? What is the current U.S. trade deficit? How much does the U.S. import and export? Rent inflation When will interest rates go down? Consumer confidence in the economy How’s the stock market doing? Latest mortgage interest rates

Is the U.S. in a recession?

The United States is not currently in a recession, but the impacts of new tariffs and a looming trade war have unsettled financial markets and raised fears of an economic downturn. Even President Donald Trump has said a recession is possible. For ongoing updates on recession news, see: Are we in a recession?

Is the U.S. economy growing?

Q4 2025 GDP: +0.7% Q4 2025 GDP: +0.7% The U.S. economy has shown steady growth since it dropped to unprecedented levels during the second quarter of 2020 due to the pandemic — and then rebounded almost as quickly. A year later, in the second quarter of 2021, the rate of annual growth hit a high not seen since the 1950s. But in the first quarter of 2025, growth declined for the first time in nearly three years, primarily due to an increase in imports — a result of businesses stocking up on goods before tariffs began. The economy moved back into positive territory in the second quarter, according to an advance estimate released on July 30, attributed to a drop in imports and an increase in consumer spending. Growth continued in the third and fourth quarters. Gross Domestic Product (GDP) is the market value — in current dollars — of all goods and services produced within the United States in a given period. The data that shows GDP adjusted for inflation is called Real GDP. All GDP changes are expressed on an annualized basis and reports are released quarterly by the Bureau of Economic Analysis. Why it matters: GDP is a barometer for the health of the country. When it’s growing, that’s a good sign: consumers are spending, businesses are producing and jobs are being created. But when the GDP shrinks, or contracts, it signals that the economy may be slowing. If it contracts for two quarters, that can be considered a recession. Why it matters: » MORE: GDP Report » MORE:

What is the U.S. unemployment rate?

February unemployment rate: 4.4% February unemployment rate: 4.4% The U.S. unemployment rate is the share of unemployed people as a percentage of the overall labor force. Unemployed people are those who are actively seeking work. The labor force doesn’t include the entire population; it’s just the number of people who are employed plus those who are unemployed but looking for jobs. The unemployment rate has topped 4% since May 2024. Why it matters: Unemployment shows how the labor market is doing. When it’s low, people are finding work and feeling confident about job-hopping. When the rate is elevated, it shows the economy could be struggling, with fewer positions available for jobseekers. Why it matters: » MORE: Current unemployment rate and other jobs report findings » MORE: » MORE: What does the U.S. manufacture and how does it impact the economy? » MORE:

How fast are wages growing?

February wage growth rate: 3.7% February wage growth rate: 3.7% Wage growth is moderating from what it was at this time in 2024 and is much lower than its peak in 2022. Still, the most recent data from the Federal Reserve Bank of Atlanta shows that annual growth is pacing much faster than it did in 2020. Why it matters: Wage growth shows how workers are doing. If wages are rising, it means the job market is strong and employers are competing for workers. But when inflation rises faster than wages, then raises won’t stretch as far and consumers lose purchasing power. Why it matters: Below is the three-month moving average of median hourly wages over the last decade.

Is inflation going down?

Inflation measures the rate of price increases, on an annual basis. The Federal Reserve is targeting a 2% inflation rate. Why it matters: The Federal Reserve targets a 2% inflation rate. Inflation reports like the consumer price index (CPI) and personal consumption expenditure (PCE) index show how fast prices are rising. When inflation rates spike and wages don’t increase as strongly, it means it could be harder for households to stay afloat. Why it matters: » MORE: What is stagflation? Are we experiencing it now? » MORE:

Consumer price index (CPI)

February CPI index: 2.4% February CPI index: 2.4% February core CPI index: 2.5% February core CPI index: 2.5% The current inflation rate typically reflects the consumer price index (CPI), released monthly by the Bureau of Labor Statistics. The CPI measures changes in prices that consumers pay for goods and services including food, gas and rent. The core measure of the consumer price index excludes two volatile factors: food and energy. » MORE: What is the consumer price index? » MORE:

Personal consumption expenditure (PCE) index

January PCE inflation rate: 2.8% January PCE inflation rate: 2.8% January core PCE rate: 3.1% January core PCE rate: 3.1% The Federal Reserve’s preferred measure of inflation is the core personal consumption expenditure (core PCE) index, which is released monthly by the Bureau of Economic Analysis. The PCE follows the goods and services consumers buy and the price they pay for them. It also tracks changes in spending habits as prices fluctuate. » MORE: What is the PCE? » MORE: » MORE: What prices are actually deflating? » MORE:

What’s happening with gas prices?

Commodity oil prices are spiking after U.S. and Israeli strikes on Iran escalated into a broader war in early March. As a result, U.S. drivers are seeing fast-rising gas prices. That price squeeze could soon intensify as refineries transition to the more expensive summer gasoline blend. Why it matters: High gas prices mean consumers have less money available for other spending, which can slow the economy. Higher fuel prices also increase costs for businesses that rely on shipping, which can pass higher costs to consumers and fuel inflation. Why it matters: » MORE: Gas prices in the U.S. » MORE: Here’s a snapshot of average U.S. gas prices right now.

How much is the U.S. dollar worth now?

The dollar index measures how the dollar compares to other currencies. The U.S. dollar is usually considered a safe haven, especially during times of market volatility and economic uncertainty. But in 2025, the value of the dollar is falling as investors sell off U.S. assets, largely due to uncertainty tied to Trump’s protectionist policies and broad sweeping tariffs. Why it matters: The strength of the U.S. dollar shows its global demand. A strong dollar makes imported goods and services cheaper for U.S. consumers and businesses. It also eases inflationary pressure in the U.S. But a strong dollar could reduce demand for imports from U.S. businesses, which could slow growth. Why it matters:

What is the current U.S. trade deficit?

U.S. trade deficit in January 2026: $54.5 billion — down 25.3% from December 2025. U.S. trade deficit in January 2026: The U.S. has run a trade deficit for decades, but it has generally decreased since tariffs went into effect. Source: U.S. Census Bureau and the Bureau of Economic Analysis (BEA). » MORE: What is the U.S. trade deficit? » MORE:

How much does the U.S. import and export?

Imports are goods that one country purchases from another country, while exports are goods that one country sells to another country. The latest U.S. Bureau of Economic Analysis (BEA) data shows: Imports in January 2026: $356.6 billion — down 0.7% from December 2025. Imports in January 2026: Exports in January 2026: $302.1 billion — up 5.55% from December 2025. Exports in January 2026: » MORE: What does the U.S. manufacture and how does it affect the economy? » MORE:

Rent inflation

Rent costs are a significant factor driving inflation. That’s because rent is included within the shelter price index and shelter comprises the biggest segment of the CPI. The rent portion of the CPI has outpaced overall inflation for decades. However, there’s a lag in how rent data is reflected in the CPI, which means rental shifts — up or down — won’t immediately be reflected in the report. The lag is due to the cycle of lease renewals. Companies that track rental prices, like the housing website Zillow, show that rent increases have slowed down for nearly a year, but that slowdown has yet to show up in the CPI report. Why it matters: When rent rises faster than wage growth, it increases living costs, which means households have less money available for other expenses. High prices also shrink the affordable options available in the rental market. Why it matters: » MORE: Rental market trends in the U.S. » MORE:

When will interest rates go down?

Federal funds rate: 3.75% to 4.00% Federal funds rate: 3.75% to 4.00% The federal funds rate, also known as the Fed rate, is the interest rate that U.S. banks pay each other to borrow or loan money overnight. The fed rate is set by the Federal Open Markets Committee (FOMC), which is the monetary policymaking arm of the nation’s central bank known as the Federal Reserve. At the FOMC’s eight scheduled meetings each year, it takes action on the federal funds rate. That means it will hike, hold or lower rates, depending on economic conditions. After a year of paused interest rates, the Fed made rate cuts at its September, November and December 2024 meetings. The FOMC has held rates steady at the majority of its 2025 meetings before making its first cut at its September meeting. A second rate cut followed at its October meeting. Why it matters: The federal funds rate affects interest rates on consumer lending products like credit cards and mortgages. When the rate rises, borrowing becomes more expensive. That can lead to tighter lending standards, which means consumers and businesses tend to borrow less. Why it matters: » MORE: What is the federal funds rate? » MORE:

Consumer confidence in the economy

Consumer confidence — or sentiment — is an index that reflects people’s perceptions about the economy in the short-term and the outlook for the future. There are two main consumer sentiment indexes: the University of Michigan’s Index of Consumer Sentiment and The Conference Board’s Consumer Confidence Index. Why it matters: Consumer sentiment shows how people feel about the economy and economists consider it a useful tool in predicting economic changes. How people feel about the economy can shape their behavior: If consumers are feeling optimistic, they’re more likely to spend money. But if their feelings are negative, they may pull back spending, which can slow economic growth. Why it matters: The University of Michigan’s Index of Consumer Sentiment The University of Michigan’s Index of Consumer Sentiment The final reading for March from the University of Michigan, released on March 27, shows: The Index of Consumer Sentiment registered at 53.3 for March, down from 56.6 for February. Current Economic Conditions registered at 55.8 for March, up from 56.6 for February. The Index of Consumer Expectations registered at 51.7 for March, down from 56.6 for February. The Conference Board’s Consumer Confidence Index The Conference Board’s Consumer Confidence Index Conference Board data for March, released on March 31, shows: The Conference Board’s Consumer Confidence Index rose 0.8 point in March to 91.8, from 91.0 in February. The Present Situation Index rose by 4.6 points to 123.3. The Expectations Index fell by 1.7 points to 70.9. » MORE: Consumer sentiment: What is it and why does it matter? » MORE:

How’s the stock market doing?

The health of the stock market is represented by major stock market indexes like the Dow Jones Industrial Average, S&P 500 or the NASDAQ 100. These indexes include broad sections of the stock market, but aren’t entirely exhaustive. That means the performance of these indexes represents the fluctuations in the entire market. So when the stock market goes up that means stock market indexes have gained value and vice versa. Why it matters: The stock market reflects investor confidence in the economy. When stock prices rise, it means investors are feeling optimistic. When prices fall, it signals investors are uncertain or concerned about the economy. These stock fluctuations affect investments, retirement accounts, consumer confidence and business decisions. Why it matters: » MORE: S&P 500 Index (SPX) » MORE: Data may be delayed and is for informational purposes only. Data may be delayed and is for informational purposes only. » MORE: Bear market? Don’t panic. Here’s how to invest during one » MORE:

Latest mortgage interest rates

Mortgage rates change daily according to what’s happening in the economy. NerdWallet’s daily mortgage rates below are calculated as an average of the annual percentage rate (APR) with the lowest points from a selection of major national mortgage lenders. The APR is based on the interest rate and indicates all of the costs of getting a loan including mortgage origination fees and discount points. Why it matters: Mortgage rates affect housing affordability. When rates go up, so do monthly payments for buyers, which could make it harder to afford homes. For current homeowners, high rates may discourage them from selling, which can tighten the housing market and drive up home prices. Why it matters: » MORE: Current mortgage interest rates » MORE: (Photo by Spencer Platt/Getty Images News via Getty Images) Explore more on Article sources NerdWallet writers are subject matter authorities who use primary, trustworthy sources to inform their work, including peer-reviewed studies, government websites, academic research and interviews with industry experts. All content is fact-checked for accuracy, timeliness and relevance. You can learn more about NerdWallet's high standards for journalism by reading our editorial guidelines. About the author Anna Helhoski is a senior writer covering economic news and trends in consumer finance at NerdWallet. She is an on-air contributor and producer of Money News segments for NerdWallet's Smart Money podcast. She is also an authority on student loans. She joined NerdWallet in 2014. Her work has been syndicated in news outlets nationwide including The Associated Press, The New York Times, The Washington Post, The Los Angeles Times and USA Today. She previously covered local news in the New York metro area for the Daily Voice and New York state politics for The Legislative Gazette. She holds a bachelor's degree in journalism from Purchase College, State University of New York. Published in SCOTUS Halts Trump’s Tariffs — What’s Next? How Could the DHS Shutdown Affect You? U.S. Lost 92,000 Jobs in February How Is Trump Handling the Economy? By Anna Helhoski Current U.S. Inflation Rate is 2.4%: Chart and Why It Matters By Anna Helhoski U.S. Lost 92,000 Jobs in February By Anna Helhoski