{"id":6523,"date":"2026-01-09T21:44:41","date_gmt":"2026-01-09T21:44:41","guid":{"rendered":"https:\/\/www.rbc.com\/en\/economics\/?p=6523"},"modified":"2026-04-02T23:43:08","modified_gmt":"2026-04-02T23:43:08","slug":"modest-inflation-to-help-consumers-maintain-spending-momentum","status":"publish","type":"post","link":"https:\/\/www.rbc.com\/en\/economics\/us-week-ahead\/modest-inflation-to-help-consumers-maintain-spending-momentum\/","title":{"rendered":"Modest inflation to help consumers maintain spending momentum"},"content":{"rendered":"\n<section class=\"wp-block-rbc-section-block  pos-rel\" style=\"border-radius:0px\">\n<div class=\"wp-block-rbc-section-inner-block  section-inner\" style=\"border-radius:0x\">\n<div class=\"wp-block-columns pad-t-hlf mob-pad-t-hlf pad-b-hlf mob-pad-b-hlf pad-l-hlf mob-pad-l-hlf pad-r-hlf mob-pad-r-hlf has-rbc-bright-blue-tint-4-background-color has-background is-layout-flex wp-container-core-columns-is-layout-65eef5bf wp-block-columns-is-layout-flex\" style=\"border-style:none;border-width:0px;border-radius:5px\">\n<div class=\"wp-block-column pad-b-hlf mob-pad-b-hlf pad-t-hlf mob-pad-t-hlf is-layout-flow wp-block-column-is-layout-flow\" style=\"flex-basis:98%\">\n<div class=\"wp-block-media-text is-stacked-on-mobile is-vertically-aligned-center mar-l-hlf pad-l-hlf\" style=\"grid-template-columns:22% auto\"><figure class=\"wp-block-media-text__media\"><img loading=\"lazy\" decoding=\"async\" width=\"1767\" height=\"1632\" src=\"https:\/\/www.rbc.com\/en\/economics\/wp-content\/uploads\/sites\/23\/\/2025\/09\/macro-1.png?quality=80&amp;w=1024\" alt=\"\" class=\"wp-image-3342 size-full\" srcset=\"https:\/\/www.rbc.com\/en\/economics\/wp-content\/uploads\/sites\/23\/2025\/09\/macro-1.png 1767w, https:\/\/www.rbc.com\/en\/economics\/wp-content\/uploads\/sites\/23\/2025\/09\/macro-1.png?resize=300,277 300w, https:\/\/www.rbc.com\/en\/economics\/wp-content\/uploads\/sites\/23\/2025\/09\/macro-1.png?resize=768,709 768w, https:\/\/www.rbc.com\/en\/economics\/wp-content\/uploads\/sites\/23\/2025\/09\/macro-1.png?resize=1024,946 1024w, https:\/\/www.rbc.com\/en\/economics\/wp-content\/uploads\/sites\/23\/2025\/09\/macro-1.png?resize=1536,1419 1536w\" sizes=\"auto, (max-width: 1767px) 100vw, 1767px\" \/><\/figure><div class=\"wp-block-media-text__content\">\n<p>Next week is packed with data \u2013 front and center will be December CPI data, the final reading of 2025 reporting ahead of the next Fed meeting. <strong>We expect to see core CPI tick up by +0.15%, with the year-over-year pace of +2.6% maintained for the month of December.<\/strong> <\/p>\n<\/div><\/div>\n<\/div>\n<\/div>\n\n\n\n<p>Importantly, we expect another modest print from owners\u2019 equivalent rent (OER) will provide the biggest help this month. We do anticipate a modest uptick in the pace of core goods, but still do not expect the tariff passthrough to fully show up just yet. Still, we maintain our view that companies are positioning to preserve market share during peak holiday shopping season. That said, we do expect to see tariff pressures show up more meaningfully in H1 2026.<\/p>\n\n\n\n<p>Additionally, the 2026 data will bring new weights for the CPI basket. Starting in the January CPI report, the recently released 2024 CEX data from will replace weights based on the 2023 CEX. Comparing the CEX data we see US consumers allocated a slightly greater share of expenditures to services compared to 2023. While we expect a modest Owners&#8217; Equivalent of Rent (OER) component of housing in December, we have this measure accelerating in 2026. And with more weight added to housing (33.4% of CEX in 2024 vs 32.9% in 2023), this dynamic will add to pre-existing services pressures. We continue to see limited scope for sizeable services deceleration as the labor market remains tight and wages comprise a large share of services inputs. Moreover, high income and wealthy consumers, many of them retirees, have continued to bolster exceptional services demand.<\/p>\n\n\n\n<p>Next week&#8217;s retail sales print will give us insight into whether the goods sector continues to outperform or the pull-forward of activity earlier this year starts to weigh on consumption. <strong>We expect to see the headline retail sales print move notably higher +0.7% in November <\/strong>after flat spending in October (likely impacted by the government shutdown). Both motor vehicle sales and gasoline prices supported the overall reading. <strong>We expect to see the retail sales control group report a slightly lower (but still strong) pace of growth at +0.5% m\/m.<\/strong> We could reasonably expect to see stronger durables spending in November, especially as consumers take advantage of Black Friday sales and ramp up holiday shopping.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity is-style-wide wide\" \/>\n\n\n\n<figure class=\"wp-block-image aligncenter size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"1318\" height=\"766\" src=\"https:\/\/www.rbc.com\/en\/economics\/wp-content\/uploads\/sites\/23\/2026\/01\/da543ea8-5734-44dc-9063-12dde209dd9a.png?quality=80\" alt=\"\" class=\"wp-image-6535\" srcset=\"https:\/\/www.rbc.com\/en\/economics\/wp-content\/uploads\/sites\/23\/2026\/01\/da543ea8-5734-44dc-9063-12dde209dd9a.png 1318w, https:\/\/www.rbc.com\/en\/economics\/wp-content\/uploads\/sites\/23\/2026\/01\/da543ea8-5734-44dc-9063-12dde209dd9a.png?resize=300,174 300w, https:\/\/www.rbc.com\/en\/economics\/wp-content\/uploads\/sites\/23\/2026\/01\/da543ea8-5734-44dc-9063-12dde209dd9a.png?resize=768,446 768w, https:\/\/www.rbc.com\/en\/economics\/wp-content\/uploads\/sites\/23\/2026\/01\/da543ea8-5734-44dc-9063-12dde209dd9a.png?resize=1024,595 1024w\" sizes=\"auto, (max-width: 1318px) 100vw, 1318px\" \/><\/figure>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity is-style-wide wide\" \/>\n\n\n\n<p>Aside from CPI and retail sales, here&#8217;s what else we are watching:<\/p>\n\n\n\n<ul class=\"wp-block-rbc-list is-style-chevron-list\">\n<li class=\"wp-block-rbc-list-item\">\n<p>The BLS is still playing catch up in the aftermath of the government shutdown. On Wednesday we will be getting PPI data for both October and November. <strong>We expect to see core PPI tick up +0.3% m\/m in October and a slightly higher +0.4% m\/m in November <\/strong>as pressures will likely continue to materialize in the trade-exposed transportation and warehousing sector in both months. December PPI data will be released at the end of January.<\/p>\n<\/li>\n\n\n\n<li class=\"wp-block-rbc-list-item\">\n<p><strong>We anticipate an upward swing in initial jobless claims for the week ending January 10<sup>th<\/sup> \u2013 up 235K \u2013 after two holiday shortened weeks likely caused a backlog.<\/strong> We expect to see claims moderate in subsequent weeks once the backlog is processed, consistent with our view that the labor market is stabilizing in a low hiring, low firing backdrop.<\/p>\n<\/li>\n\n\n\n<li class=\"wp-block-rbc-list-item\">\n<p><strong>We will be getting delayed new home sales data for both September and October and anticipate a continued moderation<\/strong> since the August spike as long end rates put a damper on housing demand.&nbsp;<\/p>\n<\/li>\n\n\n\n<li class=\"wp-block-rbc-list-item\">\n<p><strong>Industrial Production is expected to tick slightly lower -0.1% in December<\/strong>, reflective of the fact that both manufacturing hours worked declined and so too did the ISM manufacturing index. This would nudge the capacity utilization rate down to 75.9%.<\/p>\n<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-image alignfull size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"3825\" height=\"2317\" src=\"https:\/\/www.rbc.com\/en\/economics\/wp-content\/uploads\/sites\/23\/2026\/01\/US-WA-Jan-09-2026.png?quality=80\" alt=\"\" class=\"wp-image-6527\" srcset=\"https:\/\/www.rbc.com\/en\/economics\/wp-content\/uploads\/sites\/23\/2026\/01\/US-WA-Jan-09-2026.png 3825w, https:\/\/www.rbc.com\/en\/economics\/wp-content\/uploads\/sites\/23\/2026\/01\/US-WA-Jan-09-2026.png?resize=300,182 300w, https:\/\/www.rbc.com\/en\/economics\/wp-content\/uploads\/sites\/23\/2026\/01\/US-WA-Jan-09-2026.png?resize=768,465 768w, https:\/\/www.rbc.com\/en\/economics\/wp-content\/uploads\/sites\/23\/2026\/01\/US-WA-Jan-09-2026.png?resize=1024,620 1024w, https:\/\/www.rbc.com\/en\/economics\/wp-content\/uploads\/sites\/23\/2026\/01\/US-WA-Jan-09-2026.png?resize=1536,930 1536w, https:\/\/www.rbc.com\/en\/economics\/wp-content\/uploads\/sites\/23\/2026\/01\/US-WA-Jan-09-2026.png?resize=2048,1241 2048w\" sizes=\"auto, (max-width: 3825px) 100vw, 3825px\" \/><\/figure>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity is-style-wide wide\" \/>\n\n\n\n<p class=\"has-text-align-center\"><strong>About the Authors<\/strong><\/p>\n\n\n\n<p><em><strong>Mike Reid<\/strong>&nbsp;i<em>s a Director, Head of US Economic Research at RBC. He is responsible for generating RBC\u2019s U.S. economic outlook, providing commentary on macro indicators, and producing written analysis around the economic backdrop.<\/em><\/em><\/p>\n\n\n\n<p><em><strong>Carrie Freestone<\/strong>&nbsp;<em>is a Senior US Economist at RBC and a member of the US Economics team at RBC Capital Markets. Carrie is responsible for projecting key US indicators including GDP, employment, consumer spending and inflation for the US. She also contributes to commentary surrounding the US economic backdrop which she delivers to clients through publications, presentations, and the media.<\/em><\/em><\/p>\n\n\n\n<p><em><strong>Imri Haggin<\/strong>&nbsp;is an economist at RBC Capital Markets, where he focuses on thematic research. His prior work has centered on consumer credit dynamics and treasury modeling, with an emphasis on leveraging data to understand behavior.<\/em><\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity is-style-wide wide\" \/>\n<\/div>\n<\/section>\n","protected":false},"excerpt":{"rendered":"","protected":false},"author":318,"featured_media":4524,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"advgb_blocks_editor_width":"","advgb_blocks_columns_visual_guide":"","footnotes":""},"categories":[86],"tags":[65,58,110],"rbc_econ_content_type":[],"class_list":["post-6523","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-us-week-ahead","tag-inflation","tag-labour-market","tag-u-s"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.2 (Yoast SEO v27.2) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ 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