Weekly economic review & outlook
A booming month for consumer spending
April 19, 2021
You Need to Know
Week in review
Another huge jump in retail sales for March
Fueled by stimulus checks, better weather, and reduced COVID concerns, retail spending surged by 9.8 percent – rounding out an exceptionally strong first quarter.
Higher energy prices lead to another sharp rise in inflation
The consumer price index (CPI) rose by a sharp 0.6 percent for March while the 12-month change jumped to 2.6 percent due to base effects from 2020.
Existing home sales expected to fall again
Although demand factors were strong, existing home sales likely fell in March due to bad weather in February, when March’s sales would have gone into contract.
New home sales should rebound
We expect that new home sales – which are counted when a sale agreement is reached – rebounded in March due to strong housing demand and improved weather.
Retail sales surged by 9.8 percent for March, as consumers rushed to stores to spend their stimulus checks from the American Rescue Plan. Given that most of these payments were distributed to households in the second half of March, there is likely to be an extended stimulus boost into April. Following this jump and due to the plunge in activity from last March as the shutdowns set in, retail spending surged by nearly 28 percent from a year earlier.