December 23, 2025 09:56 PM GMT US Economics | North America What's going on, part 2? Firms are pushing price to recover tariff costs The Q3 US GDP report indicates firms took a significant step towards recovering the costs of tariffs by pushing output prices higher. This should mean less downside risk to the labor market and lower recession probabilities, supporting our outlook for a rebound in growth in 2026. Key Takeaways Exhibit 1: Price, cost, and profit per unit of real gross value added on nonfinancia ...

Vi e w p o i n t | 23 Dec 2025 04:21:39 ET │ 16 pages Japan Economics Prospects for 2026：Will seeds of destabilization emerge amidst stability? CITI'S TAKE We expect Japan's GDP to grow at above-trend +1.0% in 2026, demonstrating resilience (albeit down modestly from +1.3% growth in 2025). As headline inflation temporarily falls below 2% and strong wage growth continues, headwinds facing purchasing power of consumers look likely to ease. We expect this situation to allow pass-throughs of rising costs to ser ...

Summary of the 2026 Consumer Outlook Conference Call Industry Overview - The report focuses on the **U.S. consumer spending** outlook for 2026, highlighting the expected growth trends and underlying economic factors. Key Points and Arguments Consumer Spending Growth - Consumer spending grew at a strong **3.5%** pace in Q3 2025 but is projected to moderate to **2.2%** in 2026 on a Q4/Q4 basis, down from **3.4%** in 2024 [2][5][30] - The slowdown is attributed to slower real income growth, with job gains slowing and tariff-related price increases keeping inflation elevated [2][5] - The new tax bill is expected to provide a **+0.2 percentage point (pp)** boost to household consumption growth in 2026, particularly in the first half of the year [10][18][21] Job Growth and Labor Income - Job growth is anticipated to rebound from **32,000** per month to **70,000** in 2026, driven by reduced tariff impacts and fiscal stimulus [11][14] - Real labor income growth is expected to rise to **2.3%** in 2026, up from **1.9%** in 2025, providing a solid foundation for consumption growth [11][22] Inflation and Wage Growth - Inflation is projected to decline more than wage growth, leading to slightly higher real wage growth of just over **1%** [15][16] - The report estimates that tariff effects have boosted inflation by **0.5pp** so far, with an additional **0.3pp** expected over the next six months [15] K-Shaped Recovery - The consumer economy is expected to exhibit a **K-shaped** recovery, with lower-income households facing the most significant challenges due to government spending cuts and reduced immigration impacting job growth [33][35] - Higher-income households are likely to experience stronger spending growth, benefiting from wealth effects driven by rising equity prices [38] Risks to Consumer Spending - Two major risks to the spending outlook include: 1. A potential weak job market that could restrain income and spending growth, particularly affecting lower-income workers [47][48] 2. A significant decline in equity or asset prices, which could turn the wealth effect into a drag on spending, with estimates suggesting a **20%** decline in equity prices could subtract **0.7pp** from consumption growth [51][52] Overall Consumption Forecast - The forecast for consumption growth in 2026 is solid at **2.2%**, exceeding the consensus forecast of **1.9%**, with stronger growth expected in the first half of the year due to fiscal and wealth effects [30][32] Additional Important Insights - The report emphasizes the importance of the new fiscal legislation and its impact on disposable income and consumption growth [18][21] - It highlights the stabilization of delinquency rates in consumer loans, suggesting that rising delinquency rates may not pose a significant risk to spending [41][42] This summary encapsulates the critical insights from the conference call regarding the U.S. consumer spending outlook for 2026, focusing on growth expectations, underlying economic factors, and potential risks.

The record for 2025 is unambiguous. Trump has repeatedly called Powell a “loser” and labeled him with the moniker “Too Late” for supposedly failing to cut short-term interest rates early enough or deeply enough. Vice President J.D. Vance chimed in that it was “monetary malpractice” for the Fed to refuse to cut rates in the spring.And let us be worried about what 2026 holds, as Trump gains even more influence over the Fed. Powell’s term as Fed chair ends in May, and Trump is expected to nominate a loyalist a ...

Core Insights - Inflation has been lower in conservative-led states compared to liberal-led states, averaging 2.5% versus 3% respectively [1] - The analysis indicates significant differences in energy and transportation costs contributing to the inflation gap [1][4] Inflation Analysis - The White House Council of Economic Advisers (CEA) utilized regional inflation data adjusted for state populations due to the absence of official state-level Consumer Price Index (CPI) [2] - Metro areas in conservative states experienced a year-over-year inflation rate of 1.9%, while those in liberal states saw a rate of 3% [3] Energy and Transportation Costs - Energy inflation is a major factor driving higher overall inflation in liberal-run cities, with cities like Baltimore, Chicago, Los Angeles, and New York experiencing rapid increases in energy prices compared to conservative states [3] - Energy and transportation costs are significant contributors to the inflation gap, affecting household expenses quickly even with slight price increases [4] Housing Affordability - Housing inflation remains high nationwide, with prices rising faster in liberal-led states than in conservative-led states [5] - The Trump administration is actively working on proposals to address housing affordability, with a comprehensive plan expected to be announced early in the new year [8][6] Voter Concerns - The findings from the CEA come at a time when inflation is a primary concern for voters, influencing discussions on energy, housing, and transportation policies that impact the cost of living [9]

For more, let's bring in Joe Leavia, counselor to the secretary of the Treasury Department. Joe, great to have you with us. Would you do you agree with that sentiment.>> I do. I mean, the thing is the GDP numbers, which we could get into, were fantastic, was all private sector led, but what struck me, Melissa, is the profound weakness in the interests sectors of the economy such as structures and residential. Structures, which are factories, by the way, they'll get a huge lift with the tax bill.uh 2026 shou ...

Core Insights - Holiday shoppers are willing to spend but are seeking value, leading to increased traffic and sales at Tanger's outlet centers [1][2] - Retailers are responding to consumer demand by offering promotions, resulting in full parking lots and steady activity during the holiday season [2] - Mastercard reported a 3.9% year-over-year increase in retail sales for November and December, while Visa noted a 4.2% increase in holiday retail spending [3] Retail Performance - Simon Property Group reported a 6.4% year-over-year increase in traffic at its malls and premium outlets during the Black Friday weekend, with many brands experiencing double-digit sales increases [4] - The overall retail environment is thriving, despite a decline in consumer confidence [4] Consumer Confidence - The Conference Board reported a 3.8-point drop in consumer confidence in December, marking the fifth consecutive decline, affecting various demographics [5] - Factors influencing consumer sentiment include prices, inflation, tariffs, and personal finance issues [6]

Joe, always good to see you. Thanks so much for joining me. >> Thank you.Very good to be with you, Jennifer. Happy holidays. >> Happy holidays to you.And what a way to kick off the holidays with such a stellar third quarter GDP number up 4.3% a full percentage point above expectations and driven by consumer spending up three and a half% though a large chunk of that from healthcare spending. Though we also saw trade really add to this number as well. Joe, can we see this level of growth sustained into next y ...

Donald Trump said he expects his Federal Reserve chair to lower interest rates if the economy is doing well, the latest signal that the president is eager for a nominee committed to borrowing cost cuts as he nears an announcement of his choice to replace Jerome Powell. “I want my new Fed Chairman to lower Interest Rates if the Market is doing well, not destroy the Market for no reason whatsoever,” Trump said in a social media post Tuesday. “Anybody that disagrees with me will never be the Fed Chairman!” ...

The roaring 20s are alive and well. That according to our next guest, Ed Yard Denny. He's the president of Yard Denny Research.He joins us now. It's good to see you. So, we were just a little delayed on the roaring 20s, maybe thanks to co and here we are about to regroup.>> Well, I think we've been doing pretty well since uh since the beginning of the of the decade. I mean, think of all the uh shocks that the economy has been hit by the pandemic, the lockdowns for two months. Uh then the social distancing, ...