What I'm Watching This Week

The Markets (as of market close January 30, 2026)

The U.S. stock market delivered a strong performance to kick off 2026. Market indexes reached record-setting levels. Overall, Wall Street showed resilience despite mixed corporate results and ongoing fiscal policy uncertainty. Each of the benchmark indexes listed here closed January in the black. The S&P 500 rose steadily throughout the month, even surpassing the 7,000 threshold for the first time in its history. The Dow’s gains reflected broad market strength, while the tech-heavy NASDAQ showed consistent upward momentum throughout the month. Entering February, investor sentiment remained cautiously optimistic.

January was a pivotal month for the U.S. economy, revealing both the strengths and vulnerabilities. The combination of fiscal stimulus, resilient corporate earnings, and technological innovation provided avenues for growth, but the headwinds from tariffs, a cooling labor market, and persistent inflation signaled a more challenging road ahead. The economy appears to be transitioning from stimulus-fueled expansion to a period of more modest, uneven growth. Gross domestic product ended the third quarter of 2025 with an annualized return of 4.4%. Forecasts suggest the fourth quarter GDP may tick down a bit.

Price pressures are moderating but remain above the Federal Reserve’s 2.0% target, impacted by tariffs, both threatened and realized, and overall fiscal policy uncertainty.

The labor market continued to show signs of strain. Job growth slowed considerably, while the unemployment rate increased from 4.1% in December 2024 to 4.4% in December 2025.

Late in January, the Federal Reserve held interest rates steady, reinforcing expectations for a stable policy path, with possibly one or two rate cuts later in the year. Among the market sectors, energy, materials, consumer staples, industrials, and communication services advanced, marking a shift away from tech shares.

About one-third of the way through fourth-quarter earnings season, the S&P 500 is reporting strong results according to the latest information from FactSet. Overall, 33.0% of the S&P 500 companies have reported actual earnings results for the fourth quarter. Of those companies, 75.0% reported actual earnings per share (EPS) above estimates, which is below the five-year average of 78% and below the 10-year average of 76.0%. Eight of the 11 sectors are reporting year-over-year growth, led by information technology, industrials, and communication services.

Ten-year Treasury yields climbed throughout January, reaching a multi-month high early in the month. The rise in yields was largely driven by a selloff of Treasury bonds, reflecting investor concerns about persistent inflation, a slowing labor market, and the perception that the Fed may need to reduce the number of interest rate cuts in 2026. Two-year Treasuries rose about 4.5 basis points in January.

Crude oil prices were on track for the first monthly increase in four months. Severe winter weather disrupted U.S. crude production, while supply concerns pushed prices sharply higher. The dollar hovered near four-year lows, making oil cheaper for foreign buyers and boosting demand. The retail price of regular gasoline was $2.853 per gallon on January 26, $0.012 above the price a month earlier but $0.250 lower than the price a year ago.

Stock Market Indexes

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark the performance of specific investments.

Latest Economic Reports

The following section contains a review of the latest economic data available as of January 30, 2026.

• Employment: Job growth was little changed in December, with the addition of 50,000 new jobs and has shown little change since April. The change in employment for October was revised down by 68,000, from -105,000 to -173,000, and the change for November was revised down by 8,000, from +64,000 to +56,000. With these revisions, employment in October and November combined was 76,000 lower than previously reported. The unemployment rate was 4.4% in December, 0.1 percentage point lower than the previous rate but 0.3 percentage point above the December 2024 estimate. The number of unemployed persons in December, at 7.5 million, edged down 278,000 from November but was 583,000 above the December 2024 estimate. The number of long-term unemployed (those jobless for 27 weeks or more) was essentially unchanged at 1.9 million from November and accounted for 26.0% of all unemployed persons. The total number of long-term unemployed in December was 397,000 above the estimate from a year earlier. The labor force participation rate inched down 0.1 percentage point to 62.4% in December from November and was 0.1 percentage point below the rate from December 2024. The employment-population ratio in December, at 59.7%, increased 0.1 percentage point from November and 0.2 percentage point from December 2024 (59.9%). In December, average hourly earnings increased by $0.12, or 0.3%, to $37.02. Over the past 12 months ended in December, average hourly earnings rose by 3.8%. The average workweek decreased by 0.1 hour to 34.2 hours in December.
• There were 209,000 initial claims for unemployment insurance for the week ended January 24, 2026. During the same period, the total number of workers receiving unemployment insurance was 1,827,000. The insured unemployment rate was 1.2%, the same rate as a year earlier. There were 210,000 initial claims a year ago, while the total number of workers receiving unemployment insurance was 1,849,000.
• FOMC/interest rates: The Federal Open Market Committee (FOMC) left the federal funds target rate range at its current 3.50%-3.75%. The majority of the Committee members based their decision on the facts that economic activity has been expanding at a solid pace, the unemployment rate showed signs of stabilization, job gains remained low, and inflation continued to be somewhat elevated. Ten members of the Committee voted in favor of the monetary policy decision, while two members voted to reduce rates by 25.0 basis points.
• GDP/budget: The economy expanded in the third quarter of 2025, impacted by a notable drop-off in goods imports due to tariffs, an increase in exports, and strong consumer spending. Gross domestic product accelerated at an annualized rate of 4.4% in the third quarter following an increase of 3.8% in the second quarter. A year ago, GDP expanded at an annualized rate of 3.3% in the third quarter. Consumer spending, as measured by the personal consumption expenditures index, rose 3.5% in the third quarter, higher than in the second quarter (2.5%) but below the 2024 pace of 4.0%. Spending on services rose 3.6% in the third quarter, compared with a 2.6% increase in the second quarter. Consumer spending on goods increased 3.0% in the third quarter (2.2% in the second quarter). Private domestic investment advanced from -13.8% in the second quarter to 0.0% in the third quarter. Nonresidential (business) fixed investment rose 3.2% in the third quarter compared with a 7.3% increase in the second quarter. Residential fixed investment declined 7.1% in the third quarter, higher than the 5.1% decrease in the second quarter. Exports rose 9.6% in the third quarter, compared with a 1.8% decrease in the previous quarter. Imports, which are a negative in the calculation of GDP, declined 4.4% in the third quarter after falling 29.3% in the second quarter.
• December 2025 saw the federal budget deficit come in at $145 billion, roughly $58 billion more than the deficit of $87 billion from a year earlier. In December, receipts totaled $484 billion, while expenditures were $629 billion. Over the three months of the current fiscal year, the government deficit sits at $602 billion, 18% less than the cumulative deficit over the same period of the previous fiscal year. Over the same three months, individual income taxes, at $606 billion, account for nearly half of the total receipts of $1,225 billion. Total expenditures for this fiscal year equal $1,827 billion, of which Social Security ($402 billion) and National Defense ($267 billion) account for the largest outlays.
• Inflation/consumer spending: According to the latest Personal Income and Outlays report, which covers October and November, personal income increased 0.1% in October, followed by a 0.3% advance in November. Disposable (after-tax) personal income ticked up 0.1% in October, followed by an increase of 0.3% in November. Personal consumption expenditures (PCE) rose 0.5% in October, the same increase as in November. From the preceding month, the PCE price index increased 0.2% in both October and November. Excluding food and energy, the PCE price index also increased 0.2% in both months. From the same month one year ago, the PCE price index increased 2.7% in October, followed by an increase of 2.8% in November. Excluding food and energy, the PCE price index also increased 2.7% in October, followed by an advance of 2.8% in November.
• The Consumer Price Index advanced 0.3% in December and 2.7% for the year, which was the same increase as over the 12 months ended in November. The largest factor in the December increase was a 0.4% rise in shelter prices. Food prices increased 0.7% over the month, while energy prices rose 0.3% in December. Prices less food and energy rose 0.2% in December. Over the last 12 months, prices for shelter rose 3.2%, energy prices increased 2.3%, and food prices increased 3.1%.
• The latest data reveals that the Producer Price Index increased 0.5% in December after rising 0.2% in November. Producer prices increased 3.0% in 2025 after advancing 3.5% in 2024. In December, prices for goods were unchanged from the previous month, while prices for services rose 0.7%. Excluding foods, energy, and trade services, producer prices moved up 0.4% in December.
• Housing: Existing home sales rose 5.1% in December and 1.4% over the last 12 months. Inventory of existing homes for sale in December, at a 3.3-month supply, declined 21.4% from November’s estimate but was in line with the rate from December 2024. The median sales price in December was $405,400, down from $410,000 in November, but higher than the December 2024 estimate of $403,700. Sales of existing single-family homes also rose 5.1% in December (1.8% over the last 12 months). The median sales price for existing single-family homes in December was $409,500, down from the November price of $415,100, and marginally higher than the December 2024 price of $408,500.
• The latest report on new home sales from the Census Bureau was released on January 13 and was for October. Sales of new single-family houses in October 2025 were 0.1% below the September rate but 18.7% above the October 2024 estimate. Inventory of new single-family homes for sale in October represented a supply of 7.9 months at the current sales rate, virtually unchanged from the September estimate but 15.1% below the estimate from a year earlier. The median sales price of new houses sold in October 2025 was $392,300. This was 3.3% below the September 2025 price of $405,800 and 8.0% below the October 2024 price of $426,300. The average sales price of new houses sold in October 2025 was $498,000. This was 3.0% above the September 2025 price of $483,500 but was 4.6% below the October 2024 price of $521,900.
• Manufacturing: Industrial production (IP) increased 0.4% in December and grew 2.0% for the year. Manufacturing output rose 0.2% in December and 2.0% for 2025. In December, the index for mining fell 0.7% (+1.7% for the year), while the index for utilities climbed 2.6% (+2.3% for 2025).
• New orders for durable goods, up three of the last four months, rose 5.3% in November. This followed a 2.1% September decline. Excluding transportation, new orders increased 0.5%. Excluding defense, new orders increased 6.6%. Transportation equipment led the November increase, climbing 14.7%, marking the third monthly increase in the last four months.
• Imports and exports: U.S. import prices increased 0.4% over the two months from September 2025 to November 2025, according to the latest report from the Bureau of Labor Statistics (BLS). Prices for exports increased 0.5% over the two months from September 2025 to November 2025. The BLS did not collect survey data for October 2025 due to a lapse in appropriations. Prices for imports increased 0.1% from November 2024 to November 2025. Export prices increased 3.3% over the 12-month period ended in November.
• The international trade in goods deficit for August was $85.5 billion, 16.8% under the July estimate. Exports of goods for August dipped 1.3%, while imports of goods declined 7.0%. Over the 12 months ended in August, exports decreased 0.4% and imports fell 4.1%.
• The latest information on international trade in goods and services, released January 29, 2026, was for November and revealed that the goods and services trade deficit was $56.8 billion, an increase of $27.6 billion from the October deficit. November exports were $292.1 billion, $10.9 billion, or 3.6% less than October exports. November imports were $348.9 billion, $16.8 billion, or 5.0%, above the October estimate. Year to date, the goods and services deficit increased $32.9 billion, or 4.1%, from the same period in 2024. Exports increased $185.7 billion, or 6.3%. Imports increased $218.6 billion, or 5.8%.
• International markets: European equities opened 2026 with record highs, extending the strong rally from late 2025. Tech and defense stocks were the main drivers of gains in January. European investors mostly shrugged off geopolitical tensions, particularly U.S. military involvement in Venezuela and tariff threats related to Greenland. Asian markets saw a heavy influx of capital and record-setting indexes but mixed performance across major countries. For January, the STOXX Europe 600 Index rose 2.6%; the United Kingdom’s FTSE advanced 2.5%; Japan’s Nikkei 225 Index gained 5.9%; and China’s Shanghai Composite Index increased 3.8%.
• Consumer confidence: January saw consumer confidence decline after a moderate increase in December. The Conference Board Consumer Confidence Index® decreased 9.7 points in January to 84.5 from an upwardly revised 94.2 in December. The Present Situation Index, based on consumers’ assessment of current business and labor market conditions, fell 9.9 points to 113.7 in January. The Expectations Index, based on consumers’ short-term outlook for income, business, and labor market conditions, decreased 9.5 points to 65.1 in January, well below the threshold of 80.0 that usually signals a recession ahead.

Eye on the Month Ahead

Heading into February, investors will likely focus on international trade, AI and big tech companies, and whether there will be a shift in the U.S. monetary policy.

The Markets (as of market close January 9, 2026)

Wall Street responded to mixed economic data by closing higher last week. The Dow reached a record high, ending the week well above the 49,000 milestone, surpassing that mark for the first time in its history. Investors were not deterred by a rather lukewarm jobs report, as the S&P 500 closed at a new record high, while a mid-week profit-taking in tech and AI stocks wasn’t enough to prevent the NASDAQ from also closing notably higher. The Russell 2000, which is reactive to industrials, healthcare, and financials, outperformed the larger-cap indexes. Nine of the 11 market sectors ended the week higher, led by materials, industrials, and energy. Information technology and utilities closed marginally in the red. Ten-year Treasury yields ticked lower. Crude oil prices inched higher as markets responded to unrest in Iran and continued uncertainty over the Venezuelan crude oil supply.

Stock Market Indexes

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic News

• Total employment rose by 50,000 in December, while the unemployment rate ticked down 0.1 percentage point to 4.4%. Employment rose by 584,000 in 2025 (an average monthly gain of 49,000), less than 2.0 million increase in 2024 (an average monthly gain of 168,000). The change in total employment for October was revised down by 68,000, and the change for November was revised down by 8,000. With these revisions, employment in October and November combined was 76,000 lower than previously reported. The total number of unemployed decreased by 278,000 in December to 7.5 million. The labor force participation rate, at 62.4%, was 0.1 percentage point less than the November estimate. The employment-population ratio inched up 0.1 percentage point to 59.7% last month. The number of long-term unemployed (those jobless for 27 weeks or more) changed little over the month at 1.9 million but was up by 397,000 over the year. The long-term unemployed accounted for 26.0% of all unemployed people in December. In December, average hourly earnings rose by $0.12, or 0.3%, to $37.02. Over the past 12 months, average hourly earnings have increased by 3.8%. The average workweek edged down by 0.1 hour to 34.2 hours in December.
• According to the latest Job Openings and Labor Turnover Summary, the number of job openings fell 303,000 to 7.1 million in November and declined 885,000 from a year earlier. The number of hires in November, at 5.4 million, was 253,000 fewer than the October estimate. The number of total separations in November, at 5.1 million, was practically unchanged from the previous month. The number of job openings for October was revised down by 221,000 to 7.4 million, the number of hires was revised up by 219,000 to 5.4 million, and the number of total separations was revised up by 19,000 to 5.1 million.
• The services sector continued to expand in December, but at a slower pace than in the previous month. According to the latest survey of purchasing managers by S&P Global, business activity in the services sector registered 52.5 last month, signaling growth in activity, but at a slower pace than in November when the index came in at 54.1. Survey respondents indicated that growth of new business was the slowest in over a year-and-a-half, while confidence weakened as the number of new hires failed to rise for the first time since last February. Meanwhile, tariffs and higher labor-related costs drove operating expenses up to the greatest degree since last May, with firms passing their higher costs on to consumers.
• According to the latest report on international trade in goods and services, released January 8, 2026, the goods and services trade deficit for October was $29.4 billion, 39.0% lower than the September deficit but 7.7% above the estimate from October 2024. In October, exports rose 2.6%, while imports fell 3.2%. Year to date, exports increased 6.3% and imports rose 6.6%.
• The number of issued residential building permits dipped 0.2% in October, and 1.1% below the October 2024 rate, according to the latest data from the Census Bureau. Building permits for single-family residences fell 0.5% in October from the prior month. The number of housing starts declined 4.6% in October and 7.8% less than a year earlier. Housing completions in October were 1.1% above the September estimate but 15.3% below the October 2024 rate.
• For the week ended January 3, there were 208,000 new claims for unemployment insurance, an increase of 8,000 from the previous week’s level, which was revised up by 1,000. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended December 27 was 1.2%, unchanged from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended December 27 was 1,914,000, an increase of 56,000 from the previous week’s level, which was revised down by 8,000. States and territories with the highest insured unemployment rates for the week ended December 20 were Washington (2.5%), New Jersey (2.4%), Massachusetts (2.3%), Minnesota (2.2%), Rhode Island (2.2%), Alaska (2.0%), Montana (1.9%), Nevada (1.9%), Oregon (1.9%), and Puerto Rico (1.9%). The largest increases in initial claims for unemployment insurance for the week ended December 27 were in New Jersey (+6,871), Pennsylvania (+5,406), Michigan (+4,794), Connecticut (+3,366), and Missouri (+2,532), while the largest decreases were in Texas (-7,951), California (-6,514), Florida (-1,981), North Carolina (-1,454), and Colorado (-1,226).
• The national average retail price for regular gasoline was $2.796 per gallon on January 5, $0.015 per gallon below the prior week’s price and $0.251 per gallon less than a year ago. Also, as of January 5, the East Coast price decreased $0.003 to $2.778 per gallon; the Midwest price ticked down $0.021 to $2.585 per gallon; the Gulf Coast price dropped $0.018 to $2.372 per gallon; the Rocky Mountain price declined $0.031 to $2.403 per gallon; and the West Coast price fell $0.023 to $3.708 per gallon.

Eye on the Week Ahead

The latest inflation data should be available this week with the presumptive releases of the Consumer Price Index and the retail sales report. Government agencies are still trying to catch up following the government shutdown in October, so there is some uncertainty as to actual release dates for most economic reports.

The Markets (as of market close December 19, 2025)

The stock market declined for most of last week, only to rally last Thursday and Friday. The last two weeks have been “catch-up” periods for the economy with the release of a large influx of economic data following the 43-day government shutdown. While last week started with heavy selling, particularly in the tech sector, a cooler-than-expected Consumer Price Index (see below) last Thursday helped drive the market higher. The S&P 500 and the NASDAQ ended the week higher, while the Dow, the Global Dow, and the small caps of the Russell 2000 closed down. Of the 11 S&P 500 market sectors, only consumer discretionary and health care outperformed. The remaining sectors closed the week in the red, with energy falling nearly 4.0%. Crude oil declined for a second straight week with prices falling to their lowest levels in nearly five years, as concerns over a global supply glut and trade tensions outweighed geopolitical risks. Despite unemployment rising (see below), evidence of waning inflationary pressures is leading some analysts to suggest a “Santa Claus” rally (historically occurring over the last five days of December) is in the offing.

Stock Market Indexes

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic News

• There will be no issue of What I’m Watchin This Week for the week ended December 26.
• The latest jobs report showed that the labor market grew by 64,000 in November, in line with most expectations. The change in total employment for August was revised down by 22,000, and the change for September was revised down by 11,000. With these revisions, employment in August and September combined was 33,000 lower than previously reported. The unemployment rate in November, at 4.6%, was 0.2 percentage point above the September rate and 0.4 percentage point above the November 2024 estimate of 4.2%. The total number of unemployed, at 7.8 million, was 700,000 above the estimate from a year earlier. The labor force participation rate was 62.5% last month, while the employment-population ratio was 59.6%. Each of these measures has shown little change over the year. The number of long-term unemployed (those jobless for 27 weeks or more) changed little at 1.9 million in November and accounted for 24.3% of all unemployed people. In November, average hourly earnings edged up by $0.05, or 0.1%, to $36.86 from September. Over the past 12 months, average hourly earnings have increased by 3.5%. The average workweek increased 0.1 hour to 34.3 hours in November.
• The Consumer Price Index (CPI) increased 0.2% over the two months from September 2025 to November 2025. The CPI less food and energy also rose 0.2% over the same two months. From September to November, shelter prices increased 0.2%, energy prices rose 1.1%, and food prices increased 0.1%. Other indexes that increased over the two months ended in November include household furnishings and operations, communication, and personal care. In contrast, the indexes for lodging away from home, recreation, and apparel decreased over the same two-month period. Over the last 12 months, the CPI increased 2.7% after rising 3.0% over the 12 months ended in September. Prices less food and energy rose 2.6% over the last 12 months. Energy prices increased 4.2% for the 12 months ended in November. Prices for food increased 2.6% over the last year. The Bureau of Labor Statistics did not collect survey data for October 2025 due to a lapse in appropriations.
• Advance estimates of U.S. retail and food services sales for October 2025 were $732.6 billion, virtually unchanged from the previous month but up 3.5% from October 2024. Retail trade sales were up 0.1% from September 2025 and 3.4% from last year. Nonstore (online) retailer sales were up 9.0% from last year, while sales at food service and drinking places were up 4.1% from October 2024.
• Existing home sales rose 0.5% in November, according to the National Association of REALTORS®. However, sales dipped 1.0% from a year earlier. Existing home inventory sat at a 4.2-month supply, down from 4.4 months in October but up from 3.8 months in November 2024. The median existing-home price was $409,200 in November, 0.8% under the October price of $412,900 but up 1.2% from the price one year ago ($404,400), which was the 29th consecutive month of year-over-year price increases. Sales of existing single-family homes increased 0.8% in November but were down 0.8% from the total a year earlier. Inventory of existing single-family homes dipped from a supply of 4.3 months in October to 4.0 months in November. The median existing single-family home price was $414,300 in November, down 1.4% from the October estimate of $420,200 but 1.3% higher than the November 2024 price of $409,200.
• For the week ended December 13, there were 224,000 new claims for unemployment insurance, a decrease of 13,000 from the previous week’s level, which was revised up by 1,000. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended December 6 was 1.2%, unchanged from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended December 6 was 1,897,000, an increase of 67,000 from the previous week’s level, which was revised down by 8,000. States and territories with the highest insured unemployment rates for the week ended November 29 were Washington (2.5%), New Jersey (2.4%), California (2.3%), Minnesota (2.2%), Massachusetts (2.1%), Puerto Rico (2.0%), Rhode Island (2.0%), Alaska (1.9%), Oregon (1.9%), Nevada (1.8%), and New York (1.8%). The largest increases in initial claims for unemployment insurance for the week ended December 6 were in California (+14,258), Illinois (+11,074), New York (+10,346), Texas (+8,206), and Georgia (+6,333), while the largest decreases were in Rhode Island (-82), Nebraska (-65), Vermont (-16), and Delaware (-3).
• The national average retail price for regular gasoline was $2.895 per gallon on December 15, $0.045 per gallon below the prior week’s price and $0.121 per gallon less than a year ago. Also, as of December 15, the East Coast price decreased $0.050 to $2.842 per gallon; the Midwest price fell $0.030 to $2.690 per gallon; the Gulf Coast price dropped $0.001 to $2.492 per gallon; the Rocky Mountain price declined $0.097 to $2.547 per gallon; and the West Coast price fell $0.105 to $3.851 per gallon.

Eye on the Week Ahead

Tuesday is a busy day for economic data, headlined by the release of the preliminary estimate of gross domestic product for the third quarter. The Bureau of Economic Analysis is releasing two estimates of third-quarter GDP (the preliminary and final versions) instead of the customary three iterations over three consecutive months. The advance estimate, initially scheduled for an October release, was not provided due to the government shutdown.