What Happened Last Week and What It Means to You: Week Ending January 2, 2026

Happy 250^th America…Let’s Celebrate all year long!! Q3 GDP expanded at a robust 4.3% annualized rate…Despite the longest government shutdown in years, GDP grew significantly above the 3.3% consensus estimate. Driven by strong consumer spending and a substantial contribution from net trade. What does it mean – Affordability continues to be the headline and major concern for us all. Yet, the consumer continues to flourish while net trade continues to favor strong demand for US goods despite the so-called expert’s predictions on tariffs and the government shutdown. Based on what I see a smaller government is a better government and a heck of a lot less expensive. Initial jobless claims for the week ending December 27 decreased by 16,000 to 199,000…Briefing.com consensus was 226,000. What does it mean – Coming in below 200,000 for just the second time this year. This should be encouraging to a market that has grown more sensitive to signals from the labor market. Existing home sales increased 0.5% month-over-month…November brought a seasonally adjusted annual rate of 4.13 million. While sales were down 1.0% on a year-over-year basis. What does it mean – November home sales got a nice boost as the Fed lowered rates. Headline inflation for November cooled to 2.7% Y/Y…Core inflation fell to 2.6% Y/Y, both significantly below consensus forecasts. What does it mean – Month-over-month inflation rates were not available due to the government shutdown. The chart below shows estimates based on inflation trends from alternative data sources.