A Chill in the Air: What We Learned During the Week of December 15 – 19

The labor market further cooled this fall. Here are five things we learned from U.S. economic data released during the week ending December 19.

The U.S. economy lost 41,000 jobs this fall. The Bureau of Labor Statistics estimates that nonfarm payrolls declined by a seasonally adjusted 105,000 jobs in October but gained 64,000 jobs in November. During the two-month period, private sector employers added 121,000 workers, mostly from health care/social assistance. The federal government shed 168,000 workers. Average weekly earnings have increased by 3.5 percent over the past year to $1,264.30. 

Based on a separate survey of households, the unemployment rate rose 2/10^ths of a percentage point to 4.6 percent. It was at 4.2 percent this time last year. The labor force expanded by 323,000 over the past two months, leading to a 1/10^th of a percentage point increase in the labor force participation rate to 62.5 percent. The typical duration of unemployment was 9.5 weeks (September 2025: 10.0 weeks), while the number of part-time workers “for economic reasons” swelled by 909,000 since September to 5.488 million. The broadest measure of labor underutilization (the U-6 series) increased by 7/10^ths of a percentage point to 8.7 percent. (The BLS did not collect household survey data in October due to the government shutdown, and the November survey was subject to a lower-than-normal response rate. The establishments survey, source of the payrolls data, is electronic, and response rates were above average for both October and November.)

Retail sales were sluggish this fall. Retail and food services sales were unchanged in October after a slight increase of 0.1 percent in September. The Census Bureau data shows a 3.5 percent rise over the past year. Sales declined at motor vehicle/parts dealers (-1.6 percent) and gas stations (-0.8 percent); however, after those, core retail sales swelled 0.5 percent in October and 4.2 percent compared to last year. Sales increased at retailers selling furniture (+2.3 percent), sporting goods/hobbies (+1.9 percent), apparel (+0.9 percent), electronics/appliances (+0.7 percent), and groceries (+0.3 percent). Sales decreased at building materials retailers (-0.9 percent), health/personal care stores (-0.6 percent), and restaurant/bars (-0.4 percent). 

Existing home sales grew for a third straight month in November. Sales of previously owned homes increased by 0.5 percent to a seasonally adjusted annualized rate (SAAR) of 4.130 million units. The National Association of Realtors measure was 1.0 percent below its year-ago level. During the month, sales improved in the Northeast (+4.1 percent) and South (+1.1 percent), remained steady in the West, and declined 2.0 percent in the Midwest. The number of unsold homes contracted 5.9 percent to 1.430 million units, equating to a 4.2-month supply. The median sales price of $409,200 was up 1.2 percent from a year earlier. NAR attributes the recent sales gain to lower mortgage rates. 

A small bump in consumer sentiment in December. The University of Michigan’s Index of Consumer Sentiment advanced 1.9 points to a seasonally adjusted 52.9 (1966Q1=100). Despite this gain, the index was 28.5 percent lower than a year earlier. The current conditions index declined by 0.7 points to 50.4 (-32.9 percent below December 2024), while the expectations measure increased by 3.6 points to 54.6 (-25.5 percent compared to December 2024). More than three in five consumers expect unemployment to continue rising in 2026, with prices increasing by 4.2 percent in the coming year.

Partial data suggest inflation moderated this fall. The Bureau of Labor Statistics reported that the Consumer Price Index (CPI) increased by a seasonally adjusted 0.2 percent between September and November. The BLS was unable to collect survey data for October and did not resume collection until mid-November. Instead, the BLS relied on nonsurvey data sources to replace its usual processes. During the same two months, energy CPI jumped 1.1 percent, while food CPI rose 0.1 percent. Excluding energy and food, core CPI increased 0.2 percent. Over the past year, CPI has grown 2.7 percent, with the core index rising 2.6 percent. 

Other U.S. economic data released over the past week:

• Jobless Claims (Week ending December 13, 2025, First-Time Claims, seasonally adjusted): 224,000 (+44,000 vs. the previous week, +32,000 vs. the same week a year earlier). 4-week moving average: 217,500 (+1.3% vs. the same week a year earlier).
• Housing Market Index (December 2025, Index (>50=A Majority of Homebuilders Are Confident About the Housing Market, seasonally adjusted): 39 (November 2025: 38; December 2024: 46).
• Business Inventories (September 2025, Manufacturers’ and Trade Inventories, seasonally adjusted): $2.670 trillion (+0.2% vs. August 2025; +1.2% vs. September 2024).
• Treasury International Capital Flows (October 2025, Net Foreign Purchases of U.S. Securities, not seasonally adjusted): +$38.9 billion (September 2025: +$204.5 billion; October 2024: +$117.8 billion.
• Agricultural Prices (October 2025, Prices Received by Farmers, not seasonally adjusted): -8.8% vs. September 2025; +6.9% vs. October 2024.

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