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Retail Sales Stall as Markets Brace for Jobs Revision, CPI

A flat holiday finish sharpens focus on the labor report’s benchmark revision seen as a swing factor for Fed rate cuts.

Overview

  • Commerce Department data showed December retail sales were unchanged from November versus a 0.4% gain expected, with the key control group down 0.1% after a downward revision to November.
  • The delayed January jobs report arrives Wednesday and includes the annual benchmark revision that economists expect will lower previously reported payroll levels after a preliminary estimate pointed to a large markdown.
  • Consensus forecasts look for modest January nonfarm payroll growth of roughly 55,000–70,000 and an unemployment rate near 4.4%, following ADP’s report of just 22,000 private jobs added.
  • January CPI is due Friday, with estimates for a 0.3% monthly rise and about 2.5% year-over-year headline inflation, a reading that could influence the timing of the next Fed rate cut.
  • The compressed release of retail, jobs, and inflation data within roughly 72 hours is intensifying market sensitivity, and the weak December sales print may prompt trims to fourth-quarter spending and GDP estimates.