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Weekly economic review & outlook Inflation surges again but softer gains likely ahead

July 19, 2021

You Need to Know

Week in review

Consumer inflation still hot for June

The CPI jumped again for June to complete the fastest quarter for price gains in 40 years. COVID impacts continue to drive outsized increases in a few areas and are masking a more modest underlying trend for inflation.

Service sector retailers see further recovery for June

Retail sales rose by 0.6 percent for June as strong sales on in-person activities offset a sharp decline in unit auto sales.

Week Ahead

Forecasts

A small decline expected for June housing starts

While the overall pace of housing starts should be strong, they were likely still held back by high input costs, lack of workers, and a low supply of available lots.

Existing home sales should see a small increase

Strong demand factors likely supported a faster pace of existing home sales for June, despite a very low supply of homes for sale.

The consumer price index (CPI) jumped again for June, rising by 0.9 percent for the fastest monthly gain in 13 years. Consumer inflation has now spiked by 5.4 percent over the past year — the second fastest rate in the past 30 years. The CPI rose by more than 2.3 percent during the second quarter, the second hottest three-month period for price gains since 1982. Core prices also climbed by a sharp 0.9 percent for June — pushing up the 12-month change in that key metric to the fastest pace in nearly 30 years at 4.5 percent.

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