Weekly economic review & outlook
The service sector rebound takes off
April 12, 2021
You Need to Know
Week in review
Service sector activity climbs to a record high
The ISM services index rose to its highest reading ever in March with a surge in demand coming off of February’s poor weather and in response to a further reopening of local economies
A big jump in producer prices – will that boost consumer prices?
The producer price index (PPI) was up sharply for March, pulling up the year-over-year change to a decade high.
Energy prices again expected to lead inflation higher
Rising energy prices likely led to a bump in consumer prices, while growth in the core rate should remain modest.
Stimulus and better weather should contribute to an explosion in retail sales
A combination of better weather and a third round of stimulus checks is expected to have led to a massive jump in retail sales for March.
Many service sector industries have taken the brunt of the pandemic’s economic impacts as government restrictions on in-person activity in response to COVID have disrupted the recovery for those businesses. The snowy and cold February weather added a further delay this year with many consumers staying indoors rather than visiting stores or restaurants. More seasonable weather and further easing of government mandates, as vaccinations increased and COVID infections fell, jumpstarted growth in March as the ISM services index soared to its highest reading ever (data back to 1997) — indicating strong sector expansion.