We at Brix Partners believe that it is important that you are well-informed about what is happening in the markets. Here are a few of the key topics of conversation that deserve the most attention this month. If you have any questions or would like to continue the conversation, please reach out.

February’s employment figures highlight an economy still adding jobs but showing signs of softening. Employers created 151,000 new positions, particularly in the healthcare, finance, transportation, and manufacturing sectors¹. Wage growth continues to trend upward, signaling employees may still have some negotiating power, despite the job growth slowdown¹. However, the unemployment rate edged up to 4.1%, reflecting shrinking federal employment, rising part-time work due to economic necessity, and a record 8.9 million Americans holding multiple jobs1. Government policies, notably spending cuts and new tariffs, are beginning to negatively impact employment, as evidenced by the largest monthly decline in federal jobs since June 2022¹. These shifts may further slow job creation and increase unemployment in the coming months.

Amid these growing concerns, the University of Michigan’s preliminary consumer sentiment index for March 2025 dropped to 57.9 from 64.7 in February, marking the lowest level since November 2022². This decline reflects widespread consumer apprehension about economic policies and rising inflation. Short-term inflation expectations increased to 4.9%, while long-term expectations surged to 3.9%, the highest since 1993². The sentiment decline was observed across various demographics and political affiliations, with individuals across all political affiliations reporting significant drops in their economic outlooks². Economists caution that this growing pessimism could dampen consumer spending, potentially hindering economic growth in the coming months. While a moderate reduction in consumer spending can help alleviate inflationary pressures, excessive cutbacks may lead to deflation and economic stagnation.

There was some good news in the latest economic data, as February’s CPI report showed inflation cooling³, reinforcing expectations that the Federal Reserve will maintain its current policy stance. Headline inflation slowed to 0.2% in February from 0.5% in January, bringing the annual rate to 2.8%³. Core CPI, which excludes food and energy, rose 0.2%, with shelter costs remaining a key contributor³. The decline in prices for cars and gas contributed to the slowdown, though egg prices surged 10.4% due to supply disruptions³. However, the relief may be short-lived, as economists warn that escalating trade tensions could drive up costs across a range of goods, potentially straining consumers and the broader economy in the months ahead.

The bottom line: The US economy is navigating a challenging period marked by heightened uncertainty, market volatility, and cautious consumer behavior. These conditions have increased recession risks and contributed to substantial market selloffs, with the S&P 500 entering correction territory on March 13, 2025, after declining more than 10% from its February 19 peak⁴. Volatility may be likely to persist until tariff policy and interest rate uncertainty become clearer and geopolitical tensions deescalate, highlighting the importance of remaining calm and cautious amid ongoing uncertainty.

Sources:

1. Bureau of Labor Statistics, https://www.bls.gov/news.release/empsit.nr0.htm
2. University of Michigan Surveys of Consumers, http://www.sca.isr.umich.edu
3. Bureau of Labor Statistics, https://www.bls.gov/news.release/cpi.nr0.htm

4. S&P 500 Historical Data, https://www.investing.com/indices/us-spx-500-historical-data

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