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* FIEND'S SUPERBEAR MARKET
REPORT *
* February 26,
2026 *
* *
* e-mail:
fiendbear@fiendbear.com
*
* web
address: http://www.fiendbear.com *
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Fiend Commentary
================
A
Strong Economy on Paper, an Affordability Recession in Real Life
As February
heads for the finish line, the big disconnect in the U.S. economy is getting
harder to ignore.
Washington
keeps selling a “strong economy” story. Markets often trade that story. But a
growing share of households live in a different
economy entirely—one defined by job insecurity, high monthly bills, and a
simple truth that never shows up in a headline CPI print:
Prices
aren’t down. They’re just rising more slowly.
That sounds
like a technicality. In real life it’s the difference between “inflation is
cooling” and “I still can’t afford what I used to.”
1) Inflation
may be easing, but the cost-of-living problem remains
January’s CPI was softer than expected on the surface, with headline CPI up
0.2% for the month and 2.4% year-over-year. Core CPI (excluding food and
energy) ran hotter month-to-month at 0.3%, with the year-over-year core rate at
2.5%.
Even if
those numbers look “better,” the pain points for households are still right
where you’d expect:
This is why
“inflation is lower” doesn’t translate into “life is cheaper.” Most people
don’t experience the economy as a math formula. They experience it as a monthly
survival test.
2) The labor
market is sending stress signals (even if the official rate isn’t screaming
yet)
Consumer confidence improved slightly in February, but the detail that matters
most is jobs: the share of consumers saying jobs are “hard to get” rose to the
highest level in five years.
That’s a
very different message than “everything is fine.” It’s a warning that the labor
market is quietly tightening for regular workers, even while markets keep
acting like the “soft landing” is guaranteed.
When people
worry about employment, they don’t spend freely. They pull back, delay
purchases, and start living defensively. That’s how an economy slows without a
dramatic headline.
3) The
consumer is tapping out
Retail sales were flat in December and “core” retail sales dipped. That’s
consistent with something we’ve been seeing for a while: consumers can keep
spending for a time, but eventually the combination of:
There’s also
an uncomfortable side note here: the savings cushion that carried many
households through the past few years is largely gone for a big segment of the
population. That means more people are relying on credit for normal life—and
credit is exactly what becomes scarce when the cycle turns.
4) Tariffs
keep the whole system unstable
This is the real “spring risk” that doesn’t fit neatly into economic models:
policy whiplash.
Even if some
tariffs are struck down or revised, businesses don’t plan on “certainty.” They
plan on what they can count on. And right now, trade policy feels like a moving
target.
That can
keep inflation simmering in the background even if growth slows—because tariffs
raise costs even when demand weakens. That is how you end up with the worst
combo: weaker employment plus stubborn prices.
5) What to
watch as March begins (the spring stress test)
Here are the pressure points that will matter more than political speeches:
Bottom line
Heading into spring, the economy looks less like a clean expansion and more
like a two-speed system: strong for asset owners and people with stable jobs,
stressful for everyone else.
If March
brings weaker reports, the public won’t be surprised—because they’ve been
living it. The only question is when Wall Street stops treating bad news as
“future rate cuts” and starts treating it as what it really is: shrinking
demand.
That’s when
a “strong economy on paper” can suddenly feel weak everywhere.
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