Noor Trends News, Technical Analysis, Educational Tools and Recommendations
U.S. retail sales unexpectedly stagnated in December, pointing to a sharper-than-expected slowdown in consumer activity at the end of 2025 and raising fresh questions about the near-term strength of the world’s largest economy.
Retail sales were flat on a month-on-month basis in December, falling well short of economists’ expectations for a 0.4% increase, according to data released Tuesday by the Commerce Department. The reading also marked a clear deceleration from November, when sales rose by a robust 0.6%.
Consumer spending is the backbone of the U.S. economy, accounting for more than two-thirds of overall economic output. It was a key driver behind the strong 4.4% annualized growth rate in gross domestic product recorded in the third quarter. As a result, any signs of weakness in retail activity tend to attract close scrutiny from markets and policymakers alike.
More closely watched core retail sales—which exclude volatile categories such as automobiles, gasoline, building materials, and food services and are more directly linked to GDP’s consumer spending component—also showed little momentum. Core sales were largely unchanged in December, following a 0.4% rise in November. Economists had been looking for a 0.3% increase.
Analysts pointed to a cooling labor market as a possible factor weighing on consumer demand, although Federal Reserve officials said earlier in January that employment conditions appeared to be “stabilizing” after a period of gradual softening.
Despite the weak December data suggesting a subdued finish to the fourth quarter, many economists remain cautiously optimistic about the outlook for 2026. Expectations of supportive tax-code changes and hopes for a more predictable pace of policy adjustments under President Donald Trump’s second year of his second term have underpinned forecasts for firmer economic growth in the months ahead.
