Saudi Arabia Macroeconomic Developments: Saudi Arabia announced that international flights through its national carrier, Saudi Arabian Airlines, will resume to 20 destinations including Washington, D.C. The news follows the Kingdom’s decision to reopen its Al Ula heritage sites to tourists on October 31 in a positive sign for the gradual return of the travel and tourism sector. The Saudi Press Agency announced in September it would seek to lift all international flight restrictions after January 1, 2021. Consumer price inflation slowed to 5.7 percent YoY in September from 6.2 percent YoY in August, but food prices (+12.6 percent) and transportation prices (+7.8 percent) remain high following the VAT increase to 15 percent on July 1. On a monthly basis, consumer prices fell 0.2 percent as education (-8.2 percent), particularly primary and secondary education, declined along with clothing & footwear (-0.4 percent) and utilities (-0.2 percent).
U.S. Macroeconomic Developments: Initial jobless claims for the week ending October 10 unexpectedly rose to 898,000 as new Pandemic Unemployment Assistance (PUA) claims declined but regular state-level program claims increased. Continuing claims data, which lags initial claims by a week, showed a 1.2 million decline in the total number receiving benefits. However, continuing claims remain above 25 million, highlighting the continued stress in the U.S. labor market. Retail sales beat expectations in September, rising 1.9 percent as autos, clothing, and restaurants saw the largest gains. Restaurants have seen five consecutive months of sales gains and are now 15 percent below pre-pandemic levels. The only goods category to see a decline was electronics which lead retail gains for several months. While outdoor accommodations have allowed restaurants to operate during Q3, colder months in Q4 will likely reimpose significant pressure on the industry’s sales.
