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Weekly economic review & outlook
Another burst of retail spending

JUL. 20, 2020

You Need to Know

Week in review

Another surge of retail spending during June

Retail sales rose by 7.5 percent for June and the level is nearly back to that of the pre-COVID peak in February.

Rising food and energy costs for consumers

A sharp drop in food prices and lower core prices offset a jump in energy prices and caused the producer price index to unexpectedly fall in June.

Week Ahead

Forecasts

Existing home sales set for a large rebound

Survey data that typically lead reported existing home sales have jumped in the past month, suggesting a large gain in sales for June.

New home sales could approach pre-COVID level

Aided by the historically low supply of existing homes on the market, new home sales in June could approach their pre-COVID level.

The LEI should show improvement, predicting further economic recovery

The growth in June for many of the indicators contributing to the LEI leads us to expect another sharp rise for June – suggesting further economic expansion in the coming months, unless the recent increase in new virus cases results in another round of significant government mandated closings.

Retail sales jumped again for June, following May’s upwardly revised 18.2 percent record increase, with a strong 7.5 percent rise. These gains erased nearly all of the lockdown-induced declines from March and April as the reopening of state and local economies led to a surge in consumer activity. As in May, improved spending for June was widespread across categories, led by outsized gains in expenditures at restaurants as well as at clothing and furniture stores — sectors that were severely hampered by the economic shutdown.

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