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Slower Inflation, More Jobs, Lower U.S. Stock Prices, and Valentine's Day

  • Writer: Doug MacGray
    Doug MacGray
  • Feb 16
  • 4 min read

February 15, 2026


INFLATION RATE DECREASES: In welcome news, the January Consumer Price index came in at 0.2% higher than the previous month, and only 2.4% higher than one year ago. "Core" CPI (which strips out energy and food) rose by 2.5% over the past twelve months. Both CPI and core CPI twelve-month numbers now sit at or near their lowest level since inflation began to rise five years ago. And yet it remains above the Federal Reserve's target of 2.0%. Energy prices in January fell by 1.5%. Food rose by 0.2%. Rents rose by 0.2% and are up 2.4% annualized over the past five months. Airline prices rose by 6.5%.


BETTER LABOR NEWS: Monthly new jobs numbers have been rather low for a while, so seeing a six-figure growth number is encouraging. According to the Bureau of Labor Statistics, the U.S. economy added 130,000 net new jobs in January. This was an upside surprise. Private payrolls increased by 172,000 and government jobs declined by 42,000. The unemployment rate decreased from 4.4% to 4.3%. Average hourly earnings rose 0.4% and for those in the private sector, average hours worked increased by 0.4%. Therefore, total earnings increased by 0.8%.


TECH SECTOR DOMINATES AGAIN: The U.S. tech sector played an outsized role in the performance of the U.S. stock indices once again as fears of the long-term disruptive effects of AI seemed to dominate. International stocks are less tech-centric, and the U.S. dollar's decreasing value continued to help those stocks remain positive while U.S. stock markets struggled. Good inflation and labor news in the U.S. helped a bit, but not enough to lift markets back into positive territory for the week. There were opportunities to gain positive returns, however. The utilities (+7.3%) and real estate (+3.6%) sectors of the S&P 500 were positive.



LONGER-TERM PERFORMANCE: Below are the annualized three-year and five-year numbers for these same indices.



BOND PORTFOLIOS RECOVERING: As you probably remember (I sure do), 2022 was a horrific year for bonds. Largely because of that year, the five-year performance of bonds as reflected in the Bloomberg US Aggregate bond index (see above), has been negative for a long time. I was quite happy when I was finally able to change the font for that data point from red to black this past week. That is the first time that five-year number has been positive since May 2024.


DECEMBER RETAIL SALES FLAT: Overall retail sales in December did not change from the prior month, a negative surprise. Overall sales were up 2.4% in 2025 but slowed later in the year. In the last three months, the annualized rate of growth was 1.5%.


U.S. DOLLAR CONTINUES TO MOVE DOWN: The ICE US Dollar Index is a geometrically averaged calculation of six currencies (Euro, Japanese yen, Canadian dollar, Swedish krona, and Swiss franc) against the U.S. dollar. That index moved down again last week by 0.09% and is down 9.56% over the past year.



SALES OF EXISTING HOMES DECREASE IN JANUARY: Sales of existing homes decreased by 8.4% in January. Is this a temporary phenomenon caused by weather? Probably, but even if there is a rebound from the weather-induced numbers, sales will likely remain near the post Great Recession lows in the months to come. Affordability has been improving of late with the mortgage rates slowly edging down and aggregate wage growth outpacing median home price gains over the past year. Inventory remains historically low and existing homeowners continue to be reluctant to sell if their existing mortgage is several percentage points lower than current rates.


HOW'D YOU DO?: For Saint Valentine's Day, I probably got a C+ or B- this year in terms of thinking ahead and thoughtfulness. I've done better. I went to a conference in Florida during the latter half of last week. The conference ended mid-day on Friday, so many of us got the same flight back to Philadelphia. I know many of these professionals. My wife and I were traveling together, and two men who were at the conference sat down next to us. Somehow the subject of Valentine's Day came up. (Unbeknownst to my wife, I had arranged for flowers to be delivered the next day, but I waited too long to get restaurant reservations and so we had to scramble to find something, hence my C+.) But both of these men were putting their head in their hands. They had both forgotten. (Thanks, guys, you made me look good!) Husbands, how would you grade yourself? How did you do?


Have a great week!


Our purpose is to honor God by helping our clients see the objective, find the path, and navigate past the obstacles to a more prosperous future.



Douglas R. MacGray, J.D., C.F.P. ®

President

Stonecrop Wealth Advisors, LLC

Direct | Cell | Fax

(610) 628 4545





"Any man worth his salt will stick up for what he believes right, but it takes a slightly better man to acknowledge instantly and without reservation when he is in error." Andrew Jackson*

"Therefore do not worry about tomorrow, for tomorrow will worry about itself. Each day has enough trouble of its own." Matthew 6:34 (NIV)


*In commemoration of the 250th anniversary of the United States, I am finding a quote from a president each week, in order. This is the seventh week, and Andrew Jackson was our seventh president.


SOURCES:

SALES OF EXISTING HOMES DECREASE IN JANUARY: https://www.ftportfolios.com/retail/blogs/economics/index.aspx

U.S. DOLLAR CONTINUES TO MOVE DOWN: YCharts,com


(c) 2026 Anno Domini, Stonecrop Wealth Advisors, LLC, All Rights Reserved


Investment advisory services offered through Stonecrop Wealth Advisors, LLC, a Registered Investment Advisor with the U.S. Securities and Exchange Commission.


SDG

*S&P 500: This is a measure of the performance of the 500 largest companies in the United States, and it a common index to track the performance of U.S. equity markets, especially the large cap markets.

*MSCI All Country World Index X US: This is a broad measure of the performance of worldwide equity markets excluding the United States.

*Bloomberg U.S. Aggregate: This is a measure of the U.S. bond markets.

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