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Weekly economic review & outlook
Business sector recovery taking shape

OCT. 12, 2020

You Need to Know

Week in review

Services index climbs again for September

The ISM services PMI improved for September as elevated production and new orders are driving rehiring of workers.

Trade deficit widens further

Imports continue to recover more rapidly than exports from the COVID plunge in trade activity, pushing up the U.S. trade deficit sharply.

Week Ahead

Forecasts

CPI inflation for September should be modest

We look for more moderate inflation in September, following several months of higher gains, helped by flat fuel prices and an economy that remains well below potential.

Solid growth expected again for retail sales

An improving labor market, rising consumer confidence, continued relaxation of COVID regulations, and strong demand for motor vehicles should contribute to solid growth in retail sales.

Stronger survey readings in recent months suggest that the business sector has rebounded sharply from the COVID shutdown. The ISM services PMI rose to a 19-month high in September, the fourth consecutive month of solid expansion readings. The business activity and new orders components rose to the second highest levels ever, trailing only June’s reopening surge. All but one of the 17 industries within the survey reported growth for September. Even the employment component, which had lagged, climbed into expansion territory as service sector rehiring continues.

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