Key Insights
In December 2025, personal consumption expenditures inflation rose to 2.9% year over year—the highest in two years. Core personal consumption expenditures inflation (excluding food and energy), which is closely tracked by the US Federal Reserve, was even higher, standing at 3%.
Rents for tenant-occupied nonfarm housing have increased by about 31% since end-2019—higher than the 20% rise in the previous six years.
Electricity prices, as measured by the personal consumption expenditures price index, are up 8% since mid-2024, while natural gas prices (for household utilities) have risen 13%.
AI Analysis
Inflation is likely to continue influencing consumer spending patterns, with consumers remaining cautious in their expenditures. A significant decline...
Market Outlook
Short-Term
In the short term, consumer spending is expected to remain subdued as households adjust to higher living costs and economic uncertainties. This cautious spending behavior may lead to slower economic growth and could impact sectors reliant on discretionary spending.
Long-Term
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