I. Overview of the latest data
The latest published data shows signs of a slowdown in U.S. consumer momentum:
Retail sales in December 2025 month-on-month: 0%
Market expectation: +0.4%
Previous value: +0.6%
Core retail sales (excluding automobiles, gasoline, building materials, and dining) decreased by 0.1% month-on-month
Retail sales unexpectedly stagnated, indicating that consumer spending has not continued the previous growth trend, raising concerns about economic momentum in 2026.
II. Structural changes: Consumption is cooling down
From a structural perspective, weakness is not a one-off event, but rather a combination of multiple factors:
1. Marginal decline in residents' consumption ability
Savings rate fell to 3.5% (the lowest in three years), with previous consumption growth partly relying on overdrawn savings.
The driving force of real consumption growth is weakening.
2. Employment and confidence weakening
Employment growth has clearly slowed, with an average of only about 28,000 new jobs per month, far below the post-pandemic period.
Consumer confidence has fallen to a multi-year low, suppressing discretionary consumption.
3. Price and affordability pressure
Rising housing, food, and medical costs weaken the purchasing power of the middle and low-income groups.
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4. A differentiation appears at the industry level
Weakness is mainly concentrated in:
Furniture electronics appliances dining
While some essential or price-sensitive areas still have growth:
Food gasoline building materials
Indicates a shift in consumption structure from discretionary consumption → essential consumption.
Three, macroeconomic implications
1. Forming downward pressure on GDP growth
Economists may lower fourth quarter GDP expectations, consumption remains the biggest driver of the U.S. economy.
2. The U.S. economy enters a stage of 'slowdown rather than recession'
Currently showing typical characteristics:
Consumption growth rate declines, employment cools, confidence weakens but has not yet shown a complete collapse
Belongs to the soft landing/growth slowdown phase at the end of the cycle.
3. Impact of Federal Reserve policy
Weak retail data usually means:
Inflation pressure easing
Probability of rate hikes has decreased
Expectations for rate cuts have strengthened (especially if employment weakens subsequently)
Four, why was consumption strong before and is now weakening?
The reason is the previous overextension + weakening wealth effect:
Previous strong consumption relied on:
Stock market rise, housing price increase, consumption of savings
But these supports are weakening, so consumption is beginning to revert to fundamentals.
Five, future trend judgment (2026)
Baseline scenario: moderate slowdown
Expected future retail growth rate:
Short term: weak
Medium term: moderate recovery (tax rebates, policy stimulus)
Long term: depends on employment and interest rates
Three key observation variables
Job market (whether it continues to deteriorate)
Inflation and real income
Interest rate path (whether to cut rates)
Six, market impact
Field Impact
U.S. stocks Consumer discretionary and retail stocks are under pressure
Dollar Short-term bias is weak
Bonds Expectations for falling rates have strengthened
Commodity Demand expectations are weakening
Seven, conclusion
This retail data falling short of expectations sends an important signal:
U.S. consumption momentum is shifting from strong to weak, and the economy is entering a growth slowdown phase.
But currently, no signs of recession have appeared; it is more likely a cyclical slowdown in a high-interest-rate environment. The future trend depends crucially on employment and monetary policy direction.