The holiday cheer fizzled fast. The data just confirmed what a lot of us have been feeling:
the consumer engine might be running out of gas. 🛒⛽
December's U.S. retail sales came in flat at 0.0%, missing the expected 0.4% gain.
This followed a seemingly strong 0.6% rise in November. The headline hides a divided story:
· Where spending grew: Home improvement & garden centers (+1.2%) and sporting goods stores (+0.4%) saw gains.
· Where it pulled back: Furniture stores (-0.9%), clothing retailers (-0.7%), and electronics/appliance stores (-0.4%) saw notable declines.
why it really matters is,
This isn't just about a weak holiday month. Analysts suggest it's a clear sign that "consumers are starting to tire". Here’s what's happening beneath the surface:
· Sentiment Finally Matches Spending: "Consumer spending has finally caught up with consumer sentiment, and not in a good way," noted one CIO. Recent confidence surveys hit multi-year lows.
· A "K-Shaped" Squeeze: While stock markets are high, many households are struggling. Delinquency rates on loans are rising, concentrated among lower-income groups.
· Markets Weigh the Data: The immediate reaction saw Treasury yields dip and the S&P 500 stall, as markets now look ahead to key jobs and inflation data later this week for the Fed's next move.
This data point is a real-world check on economic resilience.
It suggests that high prices, a softening labor market, and depleted savings are finally weighing on the main driver of the U.S. economy: the everyday consumer.
The question now is whether this is a pause or the start of a new trend.