Weekly economic review & outlook Inflation spike likely at its peak
You Need to Know
Week in review
Inflation slowed but remained hot in May
While the monthly gain in the consumer price index slowed, the 12-month trend rate surged to 5.0 percent for May mostly from base effects and COVID-caused supply chain problems.
Job openings aplenty but who wants them?
Job postings surged to a record 9.3 million for April as businesses expand but can’t find qualified workers; meanwhile the workers are quitting jobs at a record pace, too.
Small decline expected for retail sales
Despite gains in jobs and wage/salary income, we expect retail sales will dip a bit based on the already reported sharp drop in light vehicle sales – which was primarily a supply-side phenomenon.
Modest climb anticipated for housing starts
We expect a modest rise in housing starts for May, led by the single-family sector, although land and labor supply issues are restraining new production and holding down the pace of starts.
The consumer price index (CPI) rose more sharply than expected for May, up by 0.6 percent, although this was down from April’s torrid pace. The May increase pushed up the year-over-year trend rate to 5.0 percent, the fastest since August 2008. The core CPI also climbed sharply, but again by less than in April, increasing by 0.7 percent to raise year-over-year core inflation to the highest rate in nearly 30 years at 3.8 percent.