22 February 2026
Week in Review: US GDP Growth Slows
Data released by the Bureau of Economic Analysis (BEA) showed that U.S. growth slowed more than expected in the fourth quarter of 2025, with GDP expanding at an annualised 1.4%. The deceleration was largely driven by a sharp contraction in government spending amid the shutdown, which weighed on overall activity. Consumer spending remained comparatively resilient at 2.4%, though momentum softened relative to earlier in the year, while government spending declined 16.6%. For 2025 overall, economic growth moderated to 2.2% from 2.8% in 2024.
Separately, the BEA reported that headline PCE inflation rose 2.9% year-on-year in December, edging higher from the prior month and marking its highest level since March 2024. Core PCE — the Federal Reserve’s preferred gauge of underlying inflation, which excludes food and energy — increased 0.4% month-on-month and 3.0% year-on-year, accelerating from November’s 0.2% and 2.8%, respectively.
Minutes from the Federal Reserve’s January meeting, released on Wednesday, highlighted a clear split among policymakers over the next move in rates. While some members indicated that additional easing could be appropriate if inflation continues to cool, others pointed to “the possibility that upward adjustments” may be required should price pressures remain elevated. The minutes also noted that the “vast majority of participants” believe downside risks to employment have eased, though the risk of more entrenched inflation remains a concern.
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Market Moves of the Week
Headline consumer price inflation in South Africa eased to 3.5% year on year in January 2026, down from 3.6% in December 2025, according to Statistics South Africa. The main contributors to the January reading were housing and utilities, food and non-alcoholic beverages, and insurance and financial services. Core inflation, which excludes food, non-alcoholic beverages, fuel and energy, increased to 3.4%, its highest in nearly a year.
Separately, Stats SA’s Quarterly Labour Force Survey reported that the official unemployment rate declined to 31.4% in the fourth quarter of 2025, from 31.9% in the third quarter, reflecting a modest improvement in labour market conditions. Overall, South Africa’s labour market shows improvements across multiple measures. However, unemployment levels remain exceptionally high, underscoring the persistence of the country’s structural jobs crisis.
The JSE All Share Index also ended the week in positive territory, gaining 2.02%, with broad based strength across all sectors. In contrast, the rand softened slightly, depreciating 0.57% against the U.S. dollar to close at R16.03 on Friday.
Chart of the Week:
.Credits: Strategiq
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