Mixed outlook between inflation and growth
Week of January 12–16
Key data on inflation, consumption, and growth shape the start of 2026
This week, markets reacted to mixed signals: stable U.S. inflation, positive surprises in retail sales, and uneven growth across Europe. Meanwhile, China strengthened its global trade presence, and Argentina closed the year with its lowest inflation in eight years.
United States
Headline inflation held at 2.7% and core inflation at 2.6%. PPI rebounded to 3% due to energy. Retail sales rose 0.6%, pointing to a segmented consumption pattern. Projected GDP was revised to 5.1%. The earnings season begins with positive results from banks.
Europe
Germany exits recession with 0.2% annual growth, though industrial activity remains weak. The United Kingdom surprised with 1.4% annual growth. Trade association BGA expects a modest recovery in Germany’s wholesale sector in 2026.
Japan
The prime minister will dissolve Parliament and call early elections. The Producer Price Index fell to 2.4% year over year in December, the lowest level since May, in line with expectations.
China
Posted a record trade surplus of $1.19 trillion in 2025. The decline in exports to the U.S. was offset by strong growth in shipments to Africa and Asia.
Argentina
Inflation closed the year at 31.5%, its lowest level since 2017. In December, prices rose 2.8%, driven by transportation, housing, and food.
Brazil
Retail sales increased 1.3% year over year in November. While positive, they remain below the historical average.
Mexico
The World Bank lowered its 2026 growth forecast to 1.3%. Fixed investment fell 5.5% year over year in October, although residential construction grew 13.5%.
Key upcoming events
- United States: markets will be closed for the Martin Luther King Jr. Holiday 01/19
- United States: the final reading of Q3 GDP growth will be released on 01/22
“The stock market is a device for transferring money from the impatient to the patient.” – Warren Buffett
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