Consumer Spending Stalls as US Economy Shows Signs of Caution

US​‍​‌‍​‍‌​‍​‌‍​‍‌ retail sales for October 2025 were unexpectedly flat month-over-month, going against economists' forecasts and signaling a pause in consumer spending amidst the continuously rising costs of living and possible impacts of tariffs on products like automobiles and electronics. On the other hand, core retail sales—which exclude highly volatile categories such as autos, gas, building materials, and food services—showed some underlying strength, but still did not meet the expectations, thus implying that consumers are still very cautious in certain areas despite the positive year-to-year trends.

The preliminary estimate of the latest ADP NER Pulse has put private sector job gains at an average of 16,250 per week for the four weeks ending November 29, 2025, thus marking a recovery from the losses of around 9,250 jobs per week that had occurred in mid-November. This comes after the full November ADP report, which indicated a net loss of 32,000 jobs and is therefore interpreted as a moment of cautious hiring stabilization following small-business-led job cuts and sector-wide challenges.

These signals are published together with official delayed employment data and manufacturing/services PMIs, which depict a weakening labor market and consumers' apprehension, even though the holiday spending is going on. Small businesses and industries such as manufacturing and professional services have been the most affected by the downturn, thus leading economists to expect the Federal Reserve to take a more cautious approach with its future rate ​‍​‌‍​‍‌​‍​‌‍​‍‌cuts.