February inflation data shows more of the same

This Marketplace episode dissects the latest economic data, focusing on February's inflation report and its implications for the U.S. economy. The PCE inflation index rose 0.4% month-on-month and 2.8% year-over-year, with core inflation still near 3%, signaling persistent price pressures. Despite weak GDP growth of just 0.5% annualized in Q4 2025—largely due to the longest government shutdown in U.S. history—economist Catherine Ann Edwards warns of emerging stagflation risks, though she notes the Federal Reserve is better equipped than in the 1970s. Meanwhile, global supply chain disruptions, especially from the Middle East war, are driving up commodity prices, particularly in plastics and petrochemicals, which are now 10–20% more expensive. These cost increases are squeezing manufacturers and could ripple through consumer prices. On the housing front, mortgage rates have risen sharply, cooling demand, though some markets like Miami remain strong. In contrast, nuclear energy is gaining momentum as a stable, clean power source, with companies like Radiant building factory-made micro-reactors for data centers and military bases. These reactors offer predictable energy costs and resilience against oil volatility, with pre-orders from Equinix and military contracts already secured. Despite public concerns over nuclear safety, the focus is shifting toward commercial, modular deployment that avoids the regulatory and public approval hurdles of traditional nuclear plants. The episode closes with a reminder that even as the U.S. produces more oil, global markets are scrambling for supply, with an 'armada of empty tankers' heading to American ports. Key takeaways include: 1) Persistent inflation and weak growth signal stagflation risks, even if not yet a recession; 2) Plastic and petrochemical prices are surging due to Middle East supply disruptions, threatening manufacturing margins; 3) Rising mortgage rates are cooling housing demand, but buyers are becoming more selective; 4) Micro-nuclear reactors offer a stable, clean energy alternative for data centers and remote facilities; 5) Government support and testing facilities are critical for the success of next-gen nuclear tech; 6) Global oil markets remain vulnerable to geopolitical shocks, despite U.S. production gains; 7) Consumer resilience is fading as disposable income drops and savings decline; 8) The energy transition is increasingly driven by AI and data center demand, making reliable power essential.