Week in Review: November 13, 2020

A relatively quite week for economic data was highlighted by inflation data which remains benign. At the headline level, consumer inflation (CPI), was unchanged in October, and up just 1.2% from the prior year. Core CPI, which excludes more volatile food and energy prices, was also flat for the month, and up just 1.6% from a year ago. At current levels, the risk of disinflation remains a bigger concern than inflation. Readings on business inflation (PPI) corroborated the current lack of inflation in the broader economy.

Consumer sentiment dipped in the first half of November, rather than posting a slight increase, as expected. Consumers’ views on current conditions and future expectations both fell. Surging coronavirus cases and uncertainty surrounding the Presidential election were cited as factors.

Weekly jobless claims improved from the prior week, falling from 757k to 709K.  Continuing claims also improved, falling from 7.22M to 6.79M. With new coronavirus cases now well above 100K/day, there is growing concern that economic activity will suffer as states impose new restrictions to stop the spread.

Outside of the U.S., 10 Southeast Asian countries, along with South Korea, China, Japan, Australia, and New Zealand signed the Regional Comprehensive Economic Partnership (RCEP).  Collectively, the 15 countries account for nearly a third of the global economy.  The deal creates a new free-trade bloc larger than either the U.S., Mexico, Canada Agreement, or the European Union.