Consumers Continue Spending: What We Learned During the Week of January 12 – 16

Retail activity was healthy in November. Here are five things we learned from U.S. economic data released during the week ending January 16. 

1. Retail sales were solid in November. Retail and food services sales increased by 0.6 percent to a seasonally adjusted $735.9 billion, reversing the 0.1 percent decline for the Census Bureau measure in October. Retail sales were up 3.3 percent from a year earlier. September to November, sales were 0.8 percent higher than the prior three-month period and 3.6 percent above the same months in 2024. Motor vehicle & parts dealers saw sales rise 1.0 percent, while gas stations experienced a 1.4 percent increase. After adjusting for both, core retail sales grew 0.4 percent for the month and 3.1 percent year-over-year. Sales increased at retailers focused on sporting goods/hobbies (+1.9 percent), building materials (+1.3 percent), apparel (+0.9 percent), health/personal care (+0.3 percent), and groceries (+0.1 percent). Sales at restaurants and bars jumped 0.6 percent, whereas furniture stores saw a slight decline of 0.1 percent.

2. Consumer inflation stayed above its target in December. The Consumer Price Index (CPI) increased by a seasonally adjusted 0.3 percent during the month. The Bureau of Labor Statistics’ most recent month-to-month inflation estimate was for September (due to the federal government shutdown disrupting data collection), and it also showed a 0.3 percent gain. Energy CPI rose 0.3 percent (even as gasoline prices declined 0.5 percent), and food CPI increased 0.7 percent. Net of both, core CPI went up 0.2 percent, matching its September increase. Prices rose for apparel (+0.6 percent), transportation services (+0.5 percent), shelter (+0.4 percent), and for both medical care services (+0.4 percent) and commodities (+0.3 percent). New vehicle prices remained steady, while those for used cars & truck dropped 1.1 percent. Over the past year, CPI has increased by 2.7 percent, with the core index up 2.6 percent.

3. Wholesale prices rose moderately in November. The Producer Price Index (PPI) for final demand increased by a seasonally adjusted 0.2 percent, up from the Bureau of Labor Statistics’ +0.1 percent October estimate. Core PPI (excluding food, energy, and trade services) also increased by 0.2 percent. PPI for all goods jumped 0.9 percent, driven by a 4.6 percent surge in wholesale energy prices (gasoline PPI: +10.5 percent). Food PPI remained unchanged, while core goods grew 0.2 percent. Services PPI stayed steady as the index for trade services fell 0.8 percent. Overall, PPI has increased 3.0 percent over the past year, with core PPI’s 12-month comparable at +3.5 percent. 

4. Existing home sales rose as 2025 came to an end. The National Association of Realtors reports that sales of previously owned homes surged 5.1 percent to a seasonally adjusted annualized rate (SAAR) of 4.35 million units. Sales were 1.4 percent higher than their year-ago level and improved month over month in all four Census regions (but were only ahead year over year in the South). Inventories contracted 18.1 percent to 1.18 million homes, the lowest since last February and equivalent to a 3.3-month supply. The median sales price of $405,400 was a tepid 0.4 percent higher than a year earlier. The press release linked the best sales rate in three years to “lower mortgage rates and slower home price growth.” 

5. Manufacturing output increased in December. The Federal Reserve estimates manufacturing production increased by a seasonally adjusted 0.2 percent after rising 0.3 percent in November. Durables goods production went up 0.1 percent (automobiles: -1.1 percent), while nondurables increased 0.3 percent. Overall industrial production rose 0.4 percent in December (matching November’s gain). Mining output declined 0.7 percent, whereas utilities output jumped 2.6 percent. Manufacturing output and overall industrial production have grown 2.0 percent over the past year. Manufacturing capacity utilization at 75.6 percent matched November’s level and was up 0.6 percentage points from December 2024 but remained below the 52-year average of 78.2 percent.

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

• Jobless Claims (Week ending January 10, 2026, First-Time Claims, seasonally adjusted): 198,000 (-9,000 vs. the previous week, -19,000 vs. the same week a year earlier). 4-week moving average: 205,000 (-3.5% vs. the same week a year earlier).
• Import Prices (November 2025, All Imports, not seasonally adjusted): +0.4% vs. September 2025; +0.1% vs. November 2024. Nonfuel Imports: +0.6% vs. September 2025; +0.7% vs. November 2024.
• Export Prices (November 2025, All Exports, not seasonally adjusted): +0.5% vs. September 2025; +3.3% vs. November 2024. Nonagricultural Exports: +0.4% vs. September 2025; +4.4% vs. November 2024.
• Housing Starts (October 2025, Privately-Owned Housing Starts, seasonally adjusted annualized rate): 1.246 million (-4.6% vs. September 2025; -7.8% vs. October 2024).
• Housing Market Index (January 2026, Index (>50 = Majority of Homebuilders Feel Confident About the Current and Near-Term Outlook for Housing, seasonally adjusted): 37 (December 2025: 39; January 2025: 47).
• Business Inventories (October 2025, Manufacturers’ and Trade Inventories, seasonally adjusted): $2.678 trillion (+0.3% vs. September 2025; +1.4% vs. October 2024).
• NFIB Small Business Optimism (December 2025, Index (1986=100), seasonally adjusted): 99.5 (November 2025: 99.0; December 2024: 105.1).
• Monthly Treasury Statement (December 2025, Fiscal Year-to-Date Budget Deficit): -$602.4 billion (-15.3% vs. YTD FY2025).
• Treasury International Capital Flows (November 2025, Net Foreign Purchases of U.S. Securities, not seasonally adjusted): +$221.8 billion (October 2025: +$52.6 billion; November 2024: +$89.3 billion).
• Beige Book

The opinions expressed here are not necessarily those of Kevin’s current employer. No endorsements are implied.