FEBRUARY 22, 2021 – RETAIL SPENDING RISES IN JANUARY
With the arrival of stimulus checks in January, consumer spending rose 5.3 percent, far exceeding economists’ expectations for a 1.2 percent increase. If one excludes cars, spending was up 5.9 percent. This news was welcomed, as expectations for growth in 2021 remain subdued as the pandemic continues to put a damper on the economy.
However, all last week’s news was not good; the Labor Department announced Thursday that unemployment claims rose to 861,000 last week, ending a downward trend that was hoped to be leading to an improving labor market. Jobs data is hampering a revitalization of the economy.
Most economists see 2021 as starting slowly, but then picking up as vaccine roll-outs accelerate and the ongoing effect of Covid lessens. Inflation, an indicator of the recovery has started to move. The producer price index leapt 1.3 percent in January, the greatest monthly gain since December 2009.