Global Retail Stagnation and Pricing Shifts Pressure Consumer Spending

United States retail sales remained flat in December, defying economist expectations of a 0.4% increase as consumer confidence reached its lowest level since 2014. The Commerce Department reported that while gas stations and food stores saw minor gains, electronics and furniture retailers experienced declines. This spending pause occurs alongside a lackluster job market, with employers adding an average of 28,000 jobs per month since December, a significant decrease from the 400,000 monthly jobs created during the 2021-2023 period.

In China, consumer price growth cooled to 0.2% in January, falling short of the 0.44% market forecast. While core inflation rose 0.8%, the National Bureau of Statistics cited falling food and energy prices as primary factors for the softened headline figure. Simultaneously, Australian supermarkets Woolworths, Coles, and Aldi have expanded per-unit pricing for produce, a move that has resulted in significant price increases per kilogram. Investigations found that "kids' bananas" were priced 99% higher by weight than standard cavendish bananas, while continental cucumbers cost 50% more per kilogram than Lebanese varieties.

The retail sector continues to face structural shifts, with the operator of Eddie Bauer and the parent company of Saks Fifth Avenue filing for bankruptcy protection. Amazon also announced the closure of nearly all Amazon Go and Amazon Fresh locations to prioritize its Whole Foods Market brand and delivery services. Federal Reserve officials have indicated there is no immediate urgency to adjust interest rates, though investors anticipate potential cuts starting in June.