U.S. Economy Thaws, but Momentum Remains Measured

Northern Trust’s February outlook sees steady but unspectacular progress as inflation cools, productivity rises and the Fed leans cautiously toward further easing 

• Q4 GDP slowed to 1.4% annualized, but 2025 growth held at 2.2% real; unemployment at 4.3% reflects cooling without recession.

• CPI eased to 2.4% y/y (2.5% core), with wage growth outpacing prices; productivity surged above 4%, hinting at AI-linked gains.

• The Fed held rates steady, with one additional cut expected mid-year; housing and autos remain subdued amid affordability constraints.

Is resilience masking fatigue—or setting up a soft-landing base case? The full outlook assesses the balance.