The US December retail sales report did not grow as expected and remained unchanged month-on-month, while the market had anticipated an increase of about 0.4 percent, The control group, which is the basis for calculating consumption in GDP, also fell 0.1 percent, showing weaker consumer momentum at the end of the year, Declines in sectors such as clothing, furniture, and autos were the main drivers of this performance, while signs of cost-of-living pressures and weak discretionary spending, especially among low-income households, were observed, Economists expect that tax refunds and wealth effects in early 2026 will partly support consumer demand despite this weakness.

According to the New York Fed survey, U.S. consumer expectations for inflation and the labor market improved slightly in January. One-year inflation expectations fell to 3.1 percent and the probability of job loss decreased, while the likelihood of finding a new job rose to about 46 percent. These signs of relative labor market stability reinforced the Fed’s recent decision to hold interest rates steady after three consecutive rate cuts. However, long-term inflation expectations for three and five years remain unchanged at 3 percent

Despite signs of rising US inventories, oil prices increased under the impact of heightened tensions related to Iran, Brent rose above $69 and WTI near $65 as the market worries about potential supply disruption if nuclear talks fail, A US oil industry report showed a significant rise in inventories, but traders focused more on geopolitical risks, Market participants are now awaiting OPEC and International Energy Agency reports on supply outlook and potential surplus this year.

The US January employment report is expected to provide a clearer picture of the actual pace of labor market slowdown and likely, with annual revisions, show that hiring was significantly slower than previous estimates, Preliminary estimates indicate a major downward adjustment in last year’s employment data, which could change the Federal Reserve’s view of the labor market and the path of interest rates, Economists expect monthly job growth of about 69,000 and an unemployment rate holding around 4.4 percent, indicating labor market weakness.