Holiday shopping season ends weakly, retail sales unexpectedly stagnant in December in the United States.

Retail sales growth in the United States unexpectedly stalled in December 2025, indicating that consumer spending has weakened as the year comes to a close. Data released on Tuesday showed that US retail sales in December were unchanged from the previous month, significantly lower than the previous value of 0.6% and the market expectation of 0.4%; core retail sales also grew by 0%, lower than the previous value of 0.5% and the market expectation of 0.3%. Eight out of thirteen retail categories saw a decline, including sales at clothing stores and furniture stores. Sales at auto dealers also decreased. Meanwhile, sales at building material stores and sporting goods retailers increased. These data suggest that as the holiday shopping season nears its end, consumer spending momentum has weakened. Although many economists expect that tax refunds at the beginning of the year will support demand, households are still unhappy with high living costs, while concerns about the job market persist. The breadth of consumer spending is also worrisome. While the wealth effect brought by the rising stock market may have boosted demand to some extent, there are signs that the resilience of discretionary spending is weakening for low-income Americans who rely on relatively moderate wage growth. Tuesday's economic data may strengthen the case for further interest rate cuts by the Federal Reserve. It is worth noting that prior to the release of this data, the US bond market had already led the way for a "rate cut rally." The yield on the 10-year US Treasury bond fell 2 basis points to 4.18%, approaching its lowest level since mid-January; while the more policy-sensitive 2-year US Treasury bond yield fell 1 basis point, showing a "bull-flattening" trend where long-term yields fall faster than short-term yields. The market currently predicts a 25% chance that the Federal Reserve will cut interest rates three times this year (each time by 25 basis points), compared to the expectation of two rate cuts a week ago.