The great US consumer

Daily update

The US labor market remains the critical driver of the US economy. In 2025, US consumers spent more and saved less of their income to afford tariffs. That requires job security. The US labor market is not strong enough to create significant pay pressures—we are very, very far from 1973—but is good enough to give consumers the confidence to spend.
The short-term US gasoline price chart looks like a vertical line, but this is not unprecedented and price levels are only now matching the highs of 2025. However more may be to come. The US administration, seemingly surprised by recent price increases, has offered talk of policy remedies—but markets seem unimpressed. While current price increases may upset US consumer sentiment, they are unlikely to change US consumer behavior at this stage.
Bearing this in mind, January retail sales offers insights into consumer trends in the near term—as recent events seem more likely to impact US politics than US economics. The consensus looks for a trend like growth in the ex-autos, ex-gasoline number (but the consensus expectation is not very good at forecasting this figure).
Euro area 4Q GDP is something of a non-event, as markets have expended all their excitement on earlier regional data.