Economic Policy Statements to TBAC: 2026 - 2nd Quarter​

IntroductionThe economic landscape under the Trump Administration is favorable, supported by robust business investment in equipment and intellectual property products, as well as solid household consumption growth. Moreover, data on investments, sales, and earnings indicate that the economy is poised for continued expansion. Business investment rose by over 10% in the first quarter of 2026 (1Q26), driven by investments in new equipment and intellectual property.On the labor side, employment growth in early 2026 underscores labor market resilience. Average monthly private payroll growth surged in 1Q26 to over 2.5 times above the monthly average in 2025. Importantly, worker wages continue to outpace inflation, even despite elevated price levels associated with the Iranian conflict.Despite recent shifts in energy costs due to the Iran conflict nudging headline inflation the U.S. economy is more resilient to fluctuations in energy prices due to increased U.S.