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Weekly economic review & outlook Inflation moderates but remains above-trend

August 16, 2021

You Need to Know

Week in review

Inflation modestly cooler for July, but still hot

The consumer price index increased by 0.5 percent to keep the 12-month trend inflation rate at a rapid 5.4 percent; core price gains were slower with a rise of 0.3 percent.

Small business optimism drops for July

Despite rising demand, the recovery for small businesses continues to be uneven as the lack of available workers and rising costs constrains growth – perhaps with some new COVID concerns.

Week Ahead


Auto sales likely to hold back stronger growth in retail sales

Declining auto sales should limit total retail sales, which were likely boosted in July by high demand for travel, a jump in gasoline prices, and back-to-school spending.

Little change expected for housing starts

While homebuilders would like to build more, they are likely already building close to capacity given labor, material, and land constraints.

The consumer price index (CPI) rose by a rapid 0.5 percent for July, although this was the smallest gain in five months. Price gains were especially strong for energy (mainly gasoline) and food, up by 1.6 and 0.7 percent, respectively. As a result, the core CPI (removing the volatile food and energy components) climbed by only 0.3 percent for the month, the slowest rise in four months.