Commentary

Will 2026 bring lower inflation and higher earnings?

Falling unit labor costs could signal lower inflation and durable earnings growth.

By: Denise Chisholm

Updated: 2/23/2026

Key Takeaways

Denise Chisholm approaches her research by looking at market data through a historian's lens. She believes historical patterns, when considered in the appropriate context, can help investors build conviction about future trends. This month, Denise explores unit labor costs that are near historical lows, their association with higher profit margins, along with the impact to the fed funds rate and inflation.

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Will 2026 bring lower inflation and higher earnings?

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Will 2026 bring lower inflation and higher earnings?

Falling unit labor costs could signal lower inflation and durable earnings growth.

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