According to the Atlanta Fed, firms’ year-ahead unit cost expectations declined to 1.9% in February, continuing a gradual normalization in cost outlook.

• Year-ahead unit cost expectations fell to 1.9% in February (from a 3.8% peak in Apr 2022) but remained slightly above the 2017–19 average of 2.0%, indicating easing yet still elevated expectations.

• Unit cost uncertainty declined after peaking in July, suggesting reduced dispersion around firms’ cost outlooks.

• Year-over-year unit cost growth averaged 2.0%, showing moderation in realized cost pressures compared with earlier periods.

• Firms reported a median +3.0% price increase over the past 12 months and expect +3.0% over the next 12 months (means 3.7% and 3.1%), indicating stable pricing behavior.

• Both realized and expected prices increased relative to November, pointing to slightly firmer pricing dynamics.

• Sales levels and profit margins compared to normal increased, signaling improved current business conditions.

• About three-quarters of firms said the One Big Beautiful Bill would have no impact on employment, investment, sales, or profits in 2026, with manufacturing and construction showing the strongest reactions, while retail reported minimal effects.