Weak retail sales for Holidays and lower wage growth as 2025 ended

We're still a bit delayed on some economic data, which means we had to wait until today to find out that consumer spending at stores slowed as 2025 ended.

U.S. retail sales were unexpectedly unchanged in December, putting consumer spending and the overall economy on a ​slower growth path heading into the new year.

The flat reading in ‌retail sales last month followed an unrevised 0.6% increase in November, the Commerce Department's Census ‌Bureau on Tuesday. Economists polled by Reuters had forecast retail sales, which are mostly goods and are not adjusted for inflation, would rise by 0.4%.....

Retail sales excluding automobiles, gasoline, building materials and food services fell 0.1% in December after a downwardly revised 0.2% gain in November. These so-called core retail sales correspond most closely with the consumer spending component of ⁠gross domestic product. They were previously reported ​to have advanced 0.4% in November.

December's drop ​and the downward revision to November's data could prompt economists to trim their fourth-quarter estimates for consumer spending and GDP.

And yet the DOW Jones Industrial Average hit its third straight record high on Tuesday. Because with Wall Streeters, bad news for the real economy is good news for them, since it’ll be cheaper to take on even more debt.

The weak number appeared to lead to an increase in bets on interest rate cuts from the Federal Reserve. While most traders still expect the Fed to hold steady next month and April, those majorities are shrinking. Meanwhile, over 75% of traders now expect rates to be lower by June.

The consumer data lays the ground for Wednesday's all-important January jobs report, in high focus following last week's signs of softening in the labor market. The latest Consumer Price Index reading is then due on Friday to give a look at inflation pressures, as the Fed continues to balance both sides of its dual mandate.

And based on the flop sweat and excuses from Trump’s Treasury Secretary and other Administration hacks this week, those jobs numbers will likely suck.

Peter Navarro: "The jobs report comes out tomorrow. We have to revise our expectations down significantly for what a monthly job number should look like ... Wall Street has to adjust for the fact that we're deporting millions of illegals out of the job market."

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— Aaron Rupar (@atrupar.com) February 10, 2026 at 8:19 AM

Or, maybe having immigration allows for higher job growth, higher demand and higher economic growth, which tends to help almost everybody. Funny how that concept eludes TrumpWorld.

We also found out on Tuesday that employers have been reducing their raises for employees, with the increase in the Employment Cost Index declining to 0.7% for the 4th Quarter of 2025. Which means the higher wage growth of the post-COVID era has now receded back to pre-COVID levels.

It’s not like the crackdowns in immigration are translating into a boost in wages for those who are left in this country, so throw Navarro's BS to the side. But it does help lead to record profits when prices keep going up by the same amount, so Trump/GOP donors like that part.

But don’t worry, all of those Trump-donating corporations will be using their multi-billion dollars in new tax cuts to hire and pay employees. You know, as soon they get done laying off thousands of the ones they have today.