{"id":5128,"date":"2025-11-21T22:04:33","date_gmt":"2025-11-21T22:04:33","guid":{"rendered":""},"modified":"2026-04-02T23:18:06","modified_gmt":"2026-04-02T23:18:06","slug":"consumers-continue-to-hang-in-as-tariffs-filter-through-supply-chains","status":"publish","type":"post","link":"https:\/\/www.rbc.com\/en\/economics\/us-analysis\/consumers-continue-to-hang-in-as-tariffs-filter-through-supply-chains\/","title":{"rendered":"U.S. consumers continue to hang in as tariffs filter through supply chains"},"content":{"rendered":"\n
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We’re one week into the reopening of the federal government<\/a> and while we have more clarity on upcoming data releases, the state of the US economy itself remains murky. September’s employment report<\/a> \u2013 which saw the unemployment rate tick up despite a strong payroll gain \u2013 provided little insight on the trajectory of the labor market. This will be problematic for the Fed as October and November employment data will not be released until after their December meeting, leaving them to make a decision with stale information.<\/p>\n<\/div><\/div>\n<\/div>\n<\/div>\n\n\n\n

Next week is light on data in a holiday shortened week, however, we will learn about the health of the US consumer via September retail sales data on Tuesday. We expect it to show that spending growth cooled (+0.2% m\/m), specifically for discretionary purchases. Since April, motor vehicles and auto parts have seen strong sales, growing at a >5% y\/y pace alongside furniture sales suggesting consumers prioritized front-loading their spending ahead of tariffs. Nonstore retailers (i.e., primarily online merchants) continue to outpace traditional channels, and are up 10% y\/y. But with wage growth slowing and tariffs now fully in place, we think higher prices will start weigh on consumption.<\/p>\n\n\n\n

We also get PPI data, which feeds into the Fed\u2019s preferred PCE deflators. While September’s CPI surprised to the downside, much of that stemmed from owners’ equivalent rent\u2014which carries greater weight in CPI than in PCE. With that in mind, we will be watching the health care PPI measures which will be important for PCE inflation. We’re forecasting PPI at +0.4% m\/m, with prices for goods and food products likely to outpace services as tariff pressures persist. The Fed will not get inflation data beyond September ahead of the December meeting. The BLS announced October CPI data will NOT be released, after price data was unable to be collected during the month of October.<\/p>\n\n\n\n

Unfortunately for the Fed, the timelier data will come after the December meeting. We continue to get updates on data release and have included a calendar below with revised data releases based on official announcements from statistical agencies. Both October and November nonfarm payrolls are scheduled for release on December 16th<\/sup>. The household survey for October, on the other hand, will not be released, so we will have a gap in the unemployment data. We also plan to watch the delayed Annual Consumer Expenditures report (now published December 19th), which determines CPI weights. Any notable shift from services to goods spending in the CEX could nudge 2026 CPI forecasts higher given the tariff pressures.<\/p>\n\n\n\n

We also have the following releases next week:<\/p>\n\n\n\n