US Retail Sales MoM for December 2025: A Solid 0.40% Gain Signals Resilient Consumer Demand
Table of Contents
- Big-Picture Snapshot
- Foundational Indicators
- Chart Dynamics
- Forward Outlook
- Closing Thoughts
- Key Markets Likely to React to Retail Sales MoM
The US retail sales for December 2025 increased by 0.40% month-over-month (MoM), according to the latest release on January 14, 2026, from the Sigmanomics database. This figure matches consensus estimates and marks a rebound from November’s 0.10% contraction. Over the past six months, retail sales have shown volatility, with a peak of 0.80% in December 2024 and a trough of -0.10% in November 2025. The 12-month average growth rate stands at approximately 0.45%, indicating that December’s performance aligns closely with the longer-term trend.
Drivers this month
- Strong holiday season spending boosted discretionary categories.
- Automotive sales and online retail contributed positively.
- Apparel and electronics showed moderate gains, offsetting weakness in gasoline sales.
Policy pulse
The 0.40% gain in retail sales supports the Federal Reserve’s cautious stance on interest rates. Inflation remains above target, but steady consumer demand suggests the economy is resilient enough to absorb moderate tightening without tipping into recession.
Market lens
Following the release, US Treasury yields edged higher, with the 2-year yield rising 5 basis points, reflecting renewed expectations of a steady Fed policy. The US dollar strengthened modestly against major currencies, while equity markets showed mixed reactions.
Retail sales are a core macroeconomic indicator, reflecting consumer spending, which accounts for roughly 70% of US GDP. The December 2025 reading of 0.40% MoM contrasts with the prior month’s -0.10%, signaling a return to growth after a brief slowdown. Year-over-year (YoY), retail sales have expanded by approximately 4.80%, underscoring sustained consumer activity despite inflationary pressures.
Monetary policy & financial conditions
The Federal Reserve’s ongoing rate hikes aim to temper inflation without stifling growth. The steady retail sales print suggests that tighter financial conditions have not yet curtailed consumer spending significantly. Credit availability remains stable, and consumer confidence indices have held near recent highs, supporting ongoing demand.
Fiscal policy & government budget
Fiscal stimulus measures have tapered, but government spending on infrastructure and social programs continues to underpin economic activity. The federal budget deficit remains elevated but is not currently constraining consumer liquidity or retail sales growth.
External shocks & geopolitical risks
Global supply chain disruptions have eased, reducing inflationary pressures on goods prices. However, geopolitical tensions in Eastern Europe and East Asia pose downside risks to energy prices and trade flows, which could indirectly affect consumer spending in coming months.
This chart highlights a stabilization and modest acceleration in retail sales after a brief slowdown in late 2025. The upward trend suggests consumer resilience and a potential buffer against economic headwinds, supporting a cautiously optimistic outlook for the US economy in early 2026.
Market lens
Immediate reaction: The US dollar index (DXY) rose 0.30% within the first hour post-release, reflecting confidence in the US economic outlook. Equity markets showed mixed responses, with consumer discretionary stocks gaining modestly.
Looking ahead, retail sales growth faces a mix of supportive and challenging factors. On the bullish side, easing inflation and stable labor markets could sustain consumer spending. The base case anticipates continued moderate growth of 0.30–0.50% MoM through Q1 2026, consistent with recent trends.
Scenario analysis
- Bullish (30% probability): Strong wage growth and pent-up demand drive retail sales above 0.60% MoM, supporting robust GDP growth and easing Fed concerns.
- Base (50% probability): Retail sales grow steadily at 0.30–0.50% MoM, reflecting balanced consumer confidence and manageable inflation.
- Bearish (20% probability): Rising interest rates and geopolitical shocks dampen spending, causing retail sales to stall or contract by up to -0.20% MoM.
Risks and opportunities
Upside risks include stronger-than-expected fiscal support or rapid inflation easing. Downside risks stem from tighter credit conditions, energy price shocks, or renewed supply chain disruptions. Monitoring consumer credit trends and inflation data will be critical for assessing the trajectory of retail sales.
The December 2025 US retail sales report from the Sigmanomics database confirms resilient consumer demand despite recent volatility. The 0.40% MoM gain aligns with the 12-month average and signals that the US economy continues to grow at a moderate pace. This data supports a steady Federal Reserve policy approach and suggests that consumer spending will remain a key driver of economic growth in 2026.
However, external risks and evolving financial conditions warrant close attention. Policymakers and market participants should weigh these factors carefully as they navigate an uncertain global environment.
Key Markets Likely to React to Retail Sales MoM
The US retail sales data is a bellwether for consumer health and economic momentum. Several markets historically track this indicator closely, reacting to shifts in consumer spending patterns and macroeconomic sentiment.
- SPY – The S&P 500 ETF often moves in tandem with retail sales, reflecting consumer-driven sectors.
- USDEUR – The US dollar to Euro currency pair reacts to US economic data, influencing trade and capital flows.
- USDJPY – Sensitive to US monetary policy expectations shaped by retail sales and inflation data.
- BTCUSD – Bitcoin’s price can reflect risk sentiment shifts tied to economic data surprises.
- AMZN – Amazon’s stock price is closely linked to retail trends and e-commerce growth.
FAQs
- What does the US Retail Sales MoM figure indicate?
- The Retail Sales MoM measures the monthly change in consumer spending at retail stores, signaling economic health and consumer confidence.
- How does retail sales data impact monetary policy?
- Strong retail sales can prompt the Federal Reserve to tighten policy to control inflation, while weak sales may encourage easing to support growth.
- Why is December 2025’s retail sales growth important?
- The 0.40% growth in December 2025 shows consumer resilience after a November dip, influencing economic forecasts and market expectations for 2026.
Takeaway: December’s retail sales rebound underscores steady US consumer demand, supporting a balanced economic outlook amid ongoing inflation and geopolitical uncertainties.
Updated 1/14/26
This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.
The December 2025 retail sales growth of 0.40% MoM compares favorably to November’s -0.10% and aligns closely with the 12-month average of 0.45%. This rebound reverses a two-month decline observed in October (-0.10%) and November (-0.10%), signaling renewed momentum in consumer spending.
Seasonally adjusted data show that sectors such as automotive (0.60%) and online retail (0.50%) led the gains, while gasoline sales contracted by 0.30%, reflecting lower energy prices. The overall trend since mid-2025 has been positive, with retail sales averaging 0.50% growth per month from June through September.