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Weekly economic review & outlook
Inflation up, driven by rising energy prices

FEB. 15, 2021

You Need to Know

Week in review

Faster inflation as gasoline prices rise

The consumer price index experienced its biggest gain since August, driven primarily by an outsized increase in gasoline prices.

Small business optimism falls for a fourth straight month

Small business optimism fell again as small businesses continue to face headwinds in the form of COVID-related restrictions on in-person activity.

Week Ahead

Forecasts

Retail sales expected to rise for the first time in four months

Following the distribution of stimulus checks in January, retail sales likely had a strong month and broke a three-month streak of negative growth.

Housing starts should be close to prior month

A pick-up in the pace of multifamily starts after a down month should help to push housing starts up a tad for January, with single-family starts little changed.

The consumer price index (CPI) rose by 0.3 percent in January which, after a downward revision for December, was the fastest gain since August. The increase came mostly from a 3.5 percent jump in energy prices. Gasoline prices skyrocketed by 7.4 percent, the second-fastest rise in over three years, and fuel oil prices rose by more than 5 percent for a second straight month. Despite the faster pace of consumer inflation for January, the 12-month trend rate in the CPI remained unchanged at 1.4 percent. The trend rate is set to jump soon, however, as the CPI fell by nearly 1.1 percent over the February-May period last year and even modest gains for this year will cause a bump in the trend rate.

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