01-16-26

Total retail and food services sales hit $735.9 billion in November 2025, up 0.6% from October and 3.3% from a year ago. This headline number combines all store and online purchases with spending at restaurants and bars. The narrower retail trade measure, which excludes restaurants and bars, totaled $635.7 billion.

These figures are seasonally adjusted to account for predictable patterns like holiday shopping, but not adjusted for inflation. Online sellers led the way with 7.2% year-over-year growth, while restaurants and bars grew 4.9%.

The housing market closed out 2025 with mixed but improving signals. Existing home sales (previously owned single-family homes, condos, and co-ops) surged to their fastest pace in nearly three years, climbing 5.1% in December to 4.35 million units annualized. All four major U.S. regions posted monthly gains, a broad-based improvement that National Association of Realtors Chief Economist Lawrence Yun attributed to lower mortgage rates and slower price growth in the fourth quarter.

The new construction market tells a different but complementary story. While October sales held essentially flat month-over-month at 737,000 units, they jumped nearly 19% compared to the same period last year. The key driver: builders are competing aggressively on price. The median new home price fell 8% year-over-year to $392,300, now roughly $13,000 below the median existing home price of $405,400.

This price inversion highlights a fundamental supply imbalance. Existing home inventory remains extremely tight at just 3.3 months, well below the 5-6 months typically considered a balanced market, as current homeowners with low-rate mortgages stay put. New construction offers a healthier 7.9 months of supply, down from 9.3 months a year ago. For buyers facing affordability challenges, newly built homes increasingly represent where the deals are, while the resale market remains competitive with prices continuing their 30-month streak of year-over-year gains.

The Bureau of Labor Statistics released its Producer Price Index report for November 2025 on January 14, 2026. The PPI measures what businesses pay for goods and services before selling them to consumers.

In November, the index rose 0.2%, matching expectations and up slightly from October's 0.1% gain. The increase came mostly from wholesale goods prices, which jumped 0.9%, the biggest monthly rise since February 2024. Prices for services held steady.

Energy was the main driver: gasoline prices spiked 10.5% for the month, accounting for more than half of the goods increase, while energy overall climbed 4.6%. That sounds alarming, but context matters. Gasoline prices remain about 16% below year-ago levels, and the national average recently hit $2.81 per gallon, the lowest since March 2021. The November jump reflected a short-term rebound from depressed levels, not a reversal of the broader downward trend.

When you strip out volatile food and energy prices, wholesale inflation was flat. That suggests underlying price pressures remain relatively calm.

Compared to a year ago, producer prices are up 3.0%.

The Consumer Price Index (CPI), the government's main measure of what Americans pay for goods and services, showed annual inflation holding steady at 2.7% in December. Prices rose 0.3% from November, matching expectations. Shelter costs, which include rent and homeowner expenses, drove most of the monthly increase with a 0.4% rise. Food prices accelerated to 3.1% annually, while energy costs moderated significantly as gasoline prices fell 3.4% compared to last year. The data suggests inflation remains above the Federal Reserve's 2% target but is not accelerating.

Core inflation held at 2.6% annually, its lowest reading since March 2021 and a sign that underlying price pressures continue to ease. The monthly increase of just 0.2% came in below the expected 0.3%, which is encouraging news for the Fed. Shelter remains the largest contributor to core inflation at 3.2% annually, though used vehicle prices are now cooling with a 1.1% monthly decline. Services excluding energy rose 0.3% for the month. The softer-than-expected reading suggests the Fed's interest rate policy is working to bring inflation back toward its 2% goal.