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Weekly economic review & outlook Inflation spikes but underlying trend is more stable

May 17, 2021

You Need to Know

Week in review

A jump in consumer inflation for April, but mostly in a few areas

The consumer price index jumped by 0.8 percent led by a few core price components – pushing up annual inflation to the fastest rate since 2008.

Flat retail sales in stimulus hangover

Following the post-stimulus pattern, retail sales showed no growth in April after the surge in spending during March.

Week Ahead


Housing starts expected to pull back

Coming off their best month since 2006, housing starts are expected to fall as a result of a retrenchment in the volatile multifamily sector.

Existing home sales expected to rebound

Strong housing demand combined with bad winter weather holding down sales in March likely led to a faster pace of existing home sales in April.

The consumer price index (CPI) jumped by 0.8 percent for April despite a moderation in gasoline prices. When combined with the sharp decline a year ago during the COVID shutdown, the 12-month change in the CPI soared to 4.2 percent — the highest level since 2008. Most of the rise in April came from core inflation components as the core CPI spiked by 0.9 percent, the largest monthly increase in nearly 40 years. Correspondingly, the 12-month pace of core inflation climbed to 3.0 percent, the fastest reading since December 1995.