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Weekly economic review & outlook
COVID-19 Surge Weakens Incoming Data

DEC. 14, 2020

You Need to Know

Week in review

Rising infections, more restrictions leading to weaker data

Jobless claims jumped in early December while small business optimism fell as governments imposed new restrictions in response to rising COVID cases – slowing consumer and business activity.

Annual inflation figures steady for November

The overall consumer price index (CPI) and the core CPI each rose by a modest 0.2 percent – keeping trend inflation below the Fed’s 2.0 percent goal.

Week Ahead

Forecasts

Another slow month expected for retail sales

Modest gains in core spending should barely offset the negative impact of falling auto sales and gasoline prices, leading to another small rise in retail sales.

Housing starts are likely to climb again

Housing starts – driven mostly by single-family starts – are expected to climb for the third straight month as builders aim to keep up with housing demand.

The most recent surge in new COVID-19 infections and the resulting government-imposed restrictions on consumer and business activity continue to weaken much of the incoming economic data. Initial jobless claims spiked to 853,000 during the week ending December 5 — the highest level since late September — a sign that layoffs in the service sector are picking up again. California accounted for nearly a quarter of the national increase in claims after issuing several local and state stay-at-home orders with cases rising. Continuing claims also moved modestly higher for the week ending November 28, the first increase since August.

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