While Wall Street holds its breath for tomorrow’s jobs report, something more important just dropped at 8:30 AM this morning.

And nobody’s paying attention.

December retail sales came in FLAT. Zero growth. 0.0%.

Economists expected +0.4%. They got nothing.

Excluding autos? Also flat. 0.0%. Expected +0.3%.

Translation: Americans stopped spending during the biggest shopping month of the year.

Let That Sink In

December is Christmas. Black Friday. Cyber Monday. Holiday bonuses. Gift cards. The month retailers live for all year.

And consumers spent… the exact same amount they spent in November.

The Commerce Department blamed “rough weather” and “persistently higher inflation.” The same excuse they use every time the data is terrible.

But here’s what they’re NOT telling you:

This isn’t about weather. This is about money. Or rather, the lack of it.

Why This Matters More Than Tomorrow’s Jobs Report

Everyone’s obsessing over Wednesday’s employment data. Will we add 55,000 jobs? 60,000? Will unemployment hold at 4.4%?

Those are backward-looking numbers. They tell you what happened in January.

Retail sales tell you what’s happening RIGHT NOW.

And right now, the American consumer is tapped out.

Retail spending represents roughly 70% of U.S. GDP. If consumers aren’t spending, the economy isn’t growing. It’s that simple.

You can have low unemployment and strong job creation. But if nobody has money left to spend, the economy grinds to a halt anyway.

The Consumer Is Broken

This morning also brought earnings from CVS Health. They beat on earnings. Beat on revenue. Stock fell 3%.

Why? Because they cut their cash flow guidance from $10 billion to $9 billion for 2026. A $1 billion reduction.

CVS doesn’t sell luxury goods. They sell prescriptions. Medicine. Basic health products. Things people NEED, not want.

If consumers are cutting back at CVS, they’re really broke.

Coca-Cola reported this morning too. Their exact words: “North America and Latin America beginning to show signs of improvement.”

Translation: Sales have been BAD. They’re just now stabilizing from terrible.

When Americans are cutting back on Coke and CVS, you know discretionary spending is dead.

The Math That Doesn’t Work

Here’s the reality Wall Street doesn’t want to face:

• Credit card debt: Record highs
• Savings rate: Near record lows
• Real wages: Haven’t kept up with inflation
• Retail sales: Flat in the peak shopping month

This isn’t “softness.” This is consumers hitting a wall.

For three years, Americans kept spending by:

1. Draining savings built up during COVID
2. Maxing out credit cards
3. Tapping home equity

All three of those wells are now dry.

December proved it. When Americans HAD to spend — Christmas gifts, holiday parties, year-end celebrations — they couldn’t.

What Happens Next

If consumers stopped spending in December when they had EVERY reason to spend, what happens in January and February when there’s NO reason to spend?

Here’s the timeline:

December: Retail sales flat (confirmed today)

January/February: Companies see revenue miss expectations

March/April: Layoffs begin

Q2 2026: Recession becomes official

Tomorrow’s jobs report might show hiring held steady at 55,000-60,000. Wall Street will breathe a sigh of relief. “See? The labor market is fine!”

But it won’t matter.

Because if nobody’s buying, companies won’t need workers. Layoffs don’t show up in the data for 2-3 months. By the time tomorrow’s jobs report reflects consumer weakness, it’ll be too late.

The Market Hasn’t Figured This Out Yet

Futures are barely moving this morning. S&P futures up 0.1%. Nasdaq basically flat.

The market is waiting for tomorrow’s jobs data to tell it what to think.

But the answer is already here. It dropped at 8:30 AM today.

Consumer spending drives 70% of GDP. Consumer spending just went to ZERO growth in the peak month. And all the excuses in the world won’t change that math.

The Bottom Line

Everyone’s focused on tomorrow’s jobs report. Will we add 55,000 jobs or 70,000? Will unemployment hold or tick up?

Those are the wrong questions.

The RIGHT question is: If consumers stopped spending in December, how long before companies stop hiring in March?

Retail sales just gave you the answer. The recession timeline just accelerated.

And Wall Street is too busy looking at tomorrow’s data to notice.

Good luck out there.

P.S. Ford reports earnings later today. They sell the second-biggest purchase Americans make after homes. If you thought December retail sales were bad, wait until you see what’s happening to auto demand.

Guardian Financial Publishing, 3571 Far West Blvd · Texas · Austin · 78731 · United StatesNo longer want to receive these emails. Unsubscribe