Early 2026 (Pre-War) Economic Statistics Appear Strong

Investors should expect continued volatility until the energy situation stabilizes.

An LPG gas tanker at anchor as traffic is down in the Strait of Hormuz, amid the U.S.-Israeli conflict with Iran, in Shinas, Oman, on March 11, 2026. Benoit Tessier/Reuters

Commentary

The War in Iran will likely impact inflation and trade in March, but the statistics released for the opening two months of 2026 are mostly good news. First, the Labor Department announced last Wednesday that the Consumer Price Index (CPI) rose just 2.4% over the previous 12 months, and the core CPI, excluding food and energy, rose just 0.2% in February and 2.5% in the past 12 months. The best news was shelter costs (“owners’ equivalent rent”) rising just 0.2% in February. Since shelter costs are up 3% in the past 12 months, they are still one of the primary sources of CPI inflation, but they now appear to be cooling off.