Another decent ISM activity print is consistent with the US economy growing at a 2.5% annual pace in 2026. The concern is that the jobs component dropped sharply in March and prices paid jumped, suggesting growing business caution in the wake of heightened economic and market angst tied to the conflict in the Middle East.

The labor market has been erratic to start 2026, creating over 100,000 jobs one month and then contracting the next. But Federal Reserve officials aren't alarmed, with one central banker suggesting zero job growth could still be considered healthy.

TS Lombard sees either a recession, an inflation surge, or an economic re-acceleration coming from the Middle East supply chain damage.

Weaker growth and higher inflation expected

Hours before President Trump's State of the Union address, House Speaker Mike Johnson told CBS News the U.S. economy is on the right track — but he added that inflation has not been "completely fixed yet." In an interview Tuesday with "CBS Evening News ...

From homebuilding to trucking, major parts of the US economy are in deep trouble. The weakness could drag the whole country into a recession.

Americans are growing more pessimistic about the US economy as the war on Iran continues to roil markets, with sentiment falling across all income groups — including the wealthiest.

Austan Goolsbee, president and CEO of the Federal Reserve Bank of Chicago, says consumer spending has helped the U.S. economy keep growing.