Wage gains and lower mortgage rates buoy Main Street economy

New data show wage gains and stronger consumer demand on Main Street: real weekly earnings rose 1.42% in 2025, retail sales climbed 3.3% year-over-year in November, and December existing-home sales rose 5.1% as mortgage rates cooled to about 6.19%. Inflation remains elevated (CPI +0.3% in December, core CPI +0.2%), keeping Fed policy in focus with rate cuts unlikely in the near term. Housing inventories remain tight, but analysts expect more listings in February, signaling a cautiously improving economy amid ongoing headwinds.