Weekly Market Commentary December 15th to December 19th 2025
Several important pieces of economic data were released this week as the government continues to catch up from the months that were skipped because of the shut-down. Let’s start with the employment situation.
Nonfarm Payrolls came in at +64,000 jobs for November when consensus called for +50,000. In isolation, this was a strong number, but the U.S. Bureau of Labor Statistics (BLS) also released October’s data, and it dropped by 108,000. The monthly average through November is approximately +58,000; while the same averages for 2024 and 2023 respectively were +168,000 and +220,000. The unemployment rate came in at 4.6% which we haven’t seen since September of 2021. Clearly there is slowing in the labor market, and this is providing mounting evidence in favor of continued rate cuts by the Fed.
Consumer inflation data was another important release this week. The Consumer Price Index (CPI) also played catch-up with an October/November blended release. There has been some skepticism in the accuracy of the data as the BLS CPI release was lower than virtually all economists’ predictions. The headline CPI came in at 2.7% when 3.10% was expected. And the Core CPI was just as strong: it came in at 2.6% when 3.0% was also expected. Digging deeper shows that there may be some confusion in the housing data, which accounts for over 35% of the CPI, built into these numbers. It appears that in the shut-down months there may be missing or under-represented data. Stay tuned as these issues tend to iron themselves out in future releases. The BLS numbers released clearly contend that consumer prices are falling.
Elsewhere in the economy this week, U.S. Retail Sales for October came in slightly better than expected but flat month-over-month. These numbers looked much better when autos were stripped out. We are still waiting for the delayed November data which begins the holiday shopping season. Lastly, the S&P U.S. Services PMI for December came in at a disappointing 52.9 when 54 was expected; and the Manufacturing PMI underwhelmed at 51.8 when 52.5 was expected. Please note both are still in expansionary territory (>50).
In the markets, a strong finish to the week closed equity markets in mixed fashion. The S&P 500 ended at 6,835 or +0.1%; the Dow Jones Industrial Average finished at 48,134 or -0.7%; and the NASDAQ eked out a gain for the week, closing at 23,308 or +0.5%. In fixed income, bonds rallied and yields fell slightly across the curve. The 10-Year U.S. Treasury yield closed at 4.15% or down 4 bps.
In the upcoming holiday shortened week, we should be getting Q3 GDP and Durable Goods. Happy holidays to all!
