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The U.S. Bureau of Labor Statistics reported the consumer price index rose 0.6% in March; this follows a 0.4% increase in February. The index is up a seasonally adjusted 2.6% from a year ago and eclipsed the 1.7% set for the period ending in February. The year-over-year gain is the highest since August 2018. Nearly half of the seasonally adjusted increase is attributable to a 9.1% increase in the gasoline index, which is up 22.5% year over year. The natural gas index also rose, contributing to a 5.0% increase in the energy index. The energy index has increased 13.2% over the last 12 months. The food index rose 0.1% in March and is up 3.5% year over year. Core CPI, which excludes the more volatile food and energy costs, increased a modest 0.3% in March and is up 1.6% year over year; this follows a 1.3% increase for the 1-year period ending in February.
Fed Chair Powell spoke at The Economic Club of Washington, D.C., and expressed optimism over the recent economic upturn, attributing it to increased vaccinations, the Fed’s low-interest rates, and the unparalleled aid from Congress. The Fed expects a 4.5% unemployment rate at the end of 2021 and 3.5% at the end of 2023. Powell indicated that raising interest rates before 2022 was highly unlikely and won’t happen until the economy hits three key milestones – 1) the labor market has effectively recovered, 2) inflation reaches 2%, and 3) inflation is modestly above 2% for some time. Regarding the deficit Fed Chair Powell stated that although unsustainable in the long-term, that “The current level of debt is very sustainable. And there’s no question of our ability to service and issue that debt for the foreseeable future.”
The U.S. Census Bureau reported new residential building permits were up 2.7% in March to a seasonally adjusted 1.766M, 30.2% above the March 2020 rate of 1.356M. Single-family permits were up 4.6% over a revised February figure of 1.146M. Privately-owned housing starts were up 19.4% to 1.739M, 37% above the March 2020 rate of 1.269M. Single-family housing starts were also up, coming in at 1.238M, 15.3% above February’s 1.074M. Privately-owned housing completions reported at 1.58M, up 16.6% from February, and 23.4% from March 2020. By region new construction was robust in March as the Midwest surged to a seasonally adjusted 122.8% over February, the Northeast was up 64%, and the South came in with a 13.5% increase. The West was the loan outlier falling 13.6%.
Wednesday April 21 – Crude Oil Inventories
Thursday April 22 – Existing Home Sales (Mar)