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Weekly economic review & outlook
Modest consumer spending continues

FEB. 17, 2020

You Need to Know

Week in review

Soft retail sales growth continues in January

Spending rose by a modest 0.3 percent to extend a softer streak for retailers over the past five months.

Inflation ekes out a modest increase

Lower energy costs held down the consumer price index (CPI) in January while core prices rose by a trend 0.2 percent.

Week Ahead

Forecasts

Housing starts to fall from expansion high

Housing starts are likely to fall in January after jumping to an expansion high. Unseasonable weather helped both December and January activity.

Existing home sales should decline as well

Based on a drop in pending home sales, existing home sales should also experience a decline in January. Demand factors remain strong, but limited supply continues to hold sales down.

Retail sales were once again softer than expected, as reduced spending at clothing and gasoline retailers offset higher sales from motor vehicle dealers and building materials/garden supply firms in January. The 0.3 percent increase was the fourth consecutive month with growth at that level or weaker (preceded by an outright decline in spending for September). Core retail sales (excluding autos, building materials, and gasoline) were flat in January and have decreased in aggregate over the past five months.

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