As we head into mid month December and what looks to be a shaky week, it is timely to look back at last week’s US economic reports to see where US economy is heading.
Like it or not, there is “synergy” between the US economy and stock market.
Jobs Opening and Labour Turnover surveys (JOLTs)
The delayed JOLTs report for October 2025 was finally out. (see below)
Job Openings were basically unchanged at 7.7 million, that was slightly better than market expectations. However, this headline strength masked signs of a cooling labor market:
Weakening Worker Confidence:
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The most telling figure was Quits rate, that held steady at 1.8%, its lowest level since May 2020.
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This signals that workers are less confident in their ability to easily switch jobs for better pay or opportunities.
Rising Layoffs:
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The rate of layoffs & discharges was little changed at 1.9 million, but the general trend has been upward, indicating that the labor market is becoming more employer-friendly and less tight.
Hiring Stagnation:
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The Hires figure was also little changed at 5.1 million, suggesting businesses are not aggressively adding staff despite the number of open positions.
US Jobless Claims.
(a) Weekly.
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For week ending 6 Dec 2025, weekly jobless claims jumped by a staggering +44,000 to 236,000, a number that was higher than forecast of around 220,000. (see below)
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The surge back to 236,000 was largely seen as a reversion to the mean rather than a genuine acceleration of layoffs.
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The moderated 4-week moving average ticked up slightly to 216,750, keeping claims within the historically modest range that has prevailed for most of 2025.
(b) Continuing.
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For week ending 29 Nov 2025, the claim numbers fell quite significantly by -99,000 to 1.838 million. (see above)
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This was the largest weekly decline in several years and came in below the market forecast of 1.95 million.
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On surface, the falling number suggests that unemployed people are finding jobs faster.
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However, analysts have leaned in, caution the number is highly susceptible to holiday and seasonal adjustments.
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The previous high levels of continuing claims near 2 million were already viewed as a sign that job-finding had become sluggish in recent months.
Week of 15 Dec, A Shaky US Market Week ?
Below is the list of pertinent US economic reports that will be out this week; some will be catch up reports due to US government shutdown, while others are up-to-date.
Due to data availability and real-estate challenges, I will only cover selected (*) reports.
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16 Dec 2025 - US non farm payroll (NFP) for November 2025. *
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16 Dec 2025 - US retail sales for October 2025. *
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16 Dec 2025 - S&P flash US services PMI for December 2025.
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16 Dec 2025 - S&P flash US manufacturing PMI for December 2025.
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18 Dec 2025 - US jobless claims - weekly & continuing. *
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18 Dec 2025 - Consumer price index (CPI) & Core consumer price index (Core CPI) for November 2025. *
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19 Dec 2025 - Consumer sentiments (final) for December 2025.
Of all the reports that will be out this week, it will be the CPI and Retail Sales that would address the 2 biggest macro risks facing US market currently: Economic Growth and Inflation.
US Retail Sales - Recap.
The last US retail sales report released was on 25 Nov 2025.
It showed a noticeable loss of momentum in consumer spending, following stronger gains in the preceding summer months. (see below)
Headline Figure:
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Sales rose +0.2% MoM, missing the consensus forecast of +0.4% gain.
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The data is decelerating sharply from the +0.6% increase recorded in August 2025.
Core Weakness:
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The most concerning sign was the "Control Group" sales (that feeds directly into US’s gross domestic product (GDP) calculations, excluding autos, gasoline, building materials, and food services), that fell -0.1%.
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Clearly indicating consumers pulled back on discretionary goods.
Divergence:
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Categories like food services (restaurants and bars) registered solid gain.
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However, discretionary sectors like (a) sporting goods, (b) apparel, and (c) electronics — all posted declines.
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Suggesting that while overall spending had remained positive, consumers were turning cautious amidst a softening labour market and lingering inflation concerns.
US Retail Sales - Forecast.
Current consensus forecast for October 2025 US retail sales report is for a small MoM increase of about 0.2%, that is status quo from September 2025 readings
Excluding autos, expectations is a slightly stronger 0.3% gain, pointing to modest but positive consumer spending momentum.
CPI - Recap.
Although US government shutdown commenced on 01 Oct 2025, the Consumer Price Index reports for September 2025 was officially released on 24 Oct 2025.
The one-off exception was linked to a non-discretionary federal program: Social Security, that required the September CPI as the final data point , in order to calculate the Social Security Cost-of-Living Adjustment (COLA) for 2026.
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MoM headline inflation rose to 0.3%, easing from August's 0.4%, while YoY headline inflation hit 3.0%, up from 2.9%. This reflects steady pressures from shelter costs and food, offset by softer energy gains.
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MoM core inflation increased to 0.2%, down from prior month’s 0.3%, while YoY core inflation came in at 3.0%, easing from August 2025’s 3.1%.
Overall, data signals controlled inflation amid resilient spending.
CPI - Forecast.
Below please find Federal Reserves Bank of Cleveland NowCasting forecast of US CPI & Core CPI (as of 12 Dec 2025) for the month of November 2025.
** Note: On 21 Nov 2025, US Bureau of Labour Statistics (BLS) confirmed that it would not retroactively collect the necessary data to fully publish October 2025 - CPI & Core CPI reports.
Month-over-Month (MoM):
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Price momentum is forecast to be rising.
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Monthly increase for both headline CPI (0.3% to 0.32%) and core CPI (0.2% to 0.25%) is expected to accelerate in November 2025.
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Re-acceleration of Core CPI MoM forecast suggests underlying goods & services inflation pressures are firming up toward end 2025.
Year-over-Year (YoY):
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Both headline CPI and core CPI are forecast to ease slightly in November 2025 compared to September 2025.
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Headline CPI YoY is projected to fall marginally from 3.0% to 2.99%.
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While Core CPI YoY is expected to decrease more noticeably from 3.0% to 2.95%.
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The annual slowdown indicates that the longer-term disinflationary trend is generally holding.
In summary, overall direction of CPI inflation is easing on a YoY basis but rising on a MoM basis, signaling renewed monthly price pressure.
US Non-Farm Payroll (NFP) - Recap.
On 20 Nov 2025, when US Non-farm (NFP) payroll report (for September 2025) was released, it showed surprising resilience, rebounding sharply after a significant revision to the August data.
Job Creation:
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NFP of +119,000 was a significant positive surprise, beating Wall Street's consensus forecast of +50,000.
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More importantly, it erased the shocking August 2025’s -4,000 revised job loss, originally reported as a gain.
Unemployment Rate.
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Despite the headline beat, unemployment rose to 4.4% from August 2025’s 4.3%, clearly indicating rising slack in US labour market.
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What made it worse was job losses were in key cyclical sectors like Transportation and Warehousing (-25,000) and continued into Federal Government (-3,000).
Wage Growth:
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Average Hourly Earnings (MoM) dipped slightly to +0.2%, indicating wage inflation pressures may be easing, despite the strong jobs number.
US NFP - Forecast.
You may not want to hear this, but Wall Street's consensus forecasts point to a dramatic cooling of US labour market for November 2025, significantly lower than the September print.
Jobs Creation.
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According to FactSet’s consensus estimates, NFP is expected to show that US economy only added between 40,000 - 50,000 jobs.
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This will be a drastic -69,000 to -79,000 reduction from September 2024.
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However, it would be consistent with what US Fed has said about a slowing job market as the main reason for its 3rd interest rate cut in 2025.
Unemployment Rate.
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Unemployment is expected to either remain status quo at 4.4% or rise marginally to 4.5%; a +0.1% gain from September 2025.
Wage Growth:
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Average Hourly Earnings (MoM) is expected to rise marginally to +0.3%, indicating wage inflation pressures may be easing, despite weaker number.
Distorted Data Warning:
Many analysts have considered coming November 2025’s NFP report "noisy".
This is because it will contain partial October 2025 data, with big government job losses from worker buyouts, that may pull headline NFP number down despite strong private hiring.
My viewpoints : (mine only)
Will US market continues to be volatile for week beginning 15 Dec 2025 ?
The only way that US market avoids being spooked is if the both NFP and CPI reports land exactly in the "Goldilocks" sweet spot, validating the Fed's 10 Dec 2025 interest rate cut and current policy stance:
Goldilocks Scenario (Minimal Spooking)
Non Farm Payroll (Tuesday):
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If report show a print of between +50,000 and +70,000 jobs added, coupled with a steady or only slightly higher unemployment rate in the range of 4.4% - 4.5%.
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Outcome would be interpreted by market as US labour market is cooling at a healthy, sustainable pace, easing wage pressure without pushing US economy into a recession, triggering a "risk-on" environment for investors.
Consumer Price Index (Thursday):
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If both Core and Headline inflation print come in at or slightly below consensus forecast, with Core CPI YoY near 2.9%.
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Such an outcome would be interpreted as inflation stalling but not reversing, thereby leaving US central bank ample room to consider implementing more interest rate cuts in 2026.
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This would likely trigger a "Risk-on" sentiment across financial markets.
The probability of hitting above narrow Goldilocks window is “low”.
I expect a volatile week for US stocks. Should I "buy the dip" this week ?
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