(with Max Hoelzl and Joel Dresang, engineered by Jason Scuglik)

No major announcements

The Commerce Department reported no change in retail sales in December, following a 0.6% decline in the value of goods and services sold in November. Eight of 13 retail categories posted lower sales, led by furniture stores. Home-and-garden centers led the five categories that gained. Adjusted for inflation, retail sales declined by 0.3% in December, at least the fourth drop since April, with data missing from October because of the federal government shutdown.

U.S. employers added 130,000 jobs in January, far above the monthly pace of 15,000 in 2025. The employment situation report from the Bureau of Labor Statistics included other estimates surpassing analyst expectations, such as a 4.3% unemployment rate, down from 4.4% in December. The labor force participation rate of prime-age workers between 25 and 54 reached its highest point in nearly 25 years. Average wage increases continued to outpace overall inflation. Still, some measures suggested a harder employment market. The U-6 underemployment rate remained above the pre-pandemic level for the 26th month in a row. And employment in temporary help services — often a harbinger of job trends — stayed below the pre-pandemic mark for the 32nd month in a row.

The four-week moving average for initial unemployment claims rose for the third week in a row but continued to indicate employer reluctance to let workers go. According to new data from the Labor Department, the rolling average of claims stayed 39% below the long-term average. Total jobless claims rose 3.5% from the week before, exceeding 2.2 million, but was 1.5% under the same time in 2025.

The U.S. housing market remained the worst in more than 30 years in January, as the National Association of Realtors reported existing home sales dropped another 8.4%. The annual rate of unit sales was down 4.4% from the year-ago pace. And while extraordinarily cold and snowy weather contributed to low sales in January, the trade group continued to cite lack of supply for the industry’s woes. The median sales price rose 0.9% from the year before to $396,800, the 31st consecutive increase. But average wages rose faster than prices, and mortgage rates were lower than the year before, which improved affordability to the best level for buyers since March 2022. That’s when the Federal Reserve began raising interest rates to combat high inflation.

Despite another increase in housing costs in January, the overall inflation rate dipped to its lowest level since May. The Bureau of Labor Statistics said its Consumer Price Index rose 0.2% from December, led by shelter costs and food prices, which were partially offset by a 3.2% dip in gas prices. Compared to January 2025, the broadest measure of inflation rose 2.4%. That’s still above the Federal Reserve’s long-term target of 2% but down from a four-decade high of 9.1% in June 2022. Excluding volatile costs for food and energy items, the core CPI added 0.3% from December and was up 2.5% from the year before, the lowest rate since reaching 1.6% in May 2021.