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Unemployment Rises to 6.6% in August 
Consumer Prices Rise 2.0% The Consumer Price Index (CPI) rose 2.0% year over year in August after rising 2.5% year over year in July, according to Statistics Canada. On a monthly basis, the CPI dropped 0.2% in August after rising 0.4% in July. Economists had expected prices to rise 0.1%. A drop in gasoline prices was the biggest contributor to the monthly slowdown in prices from July to August. Housing and Construction News Housing starts plunged 22% in August after surging to their highest level in more than a year in July. The seasonally adjusted annualized rate of housing starts fell to 217,405 units from an upwardly revised 279,804 units in July, according to the Canadian Mortgage and Housing Corporation (CMHC). Economists had expected starts to fall to 252,500 units. The six-month moving average of the seasonally adjusted annual rate of housing starts was 248,480 units in August, down 2.9% from July. Canadian home sales rose 1.3% in August after falling 0.7% in July but were down 21% from August 2024, according to the Canadian Real Estate Association (CREA). The number of newly listed properties ticked up 1.1% after being up 0.9% in July. The national average home price was $649,100 in August, nearly unchanged from August 2023. Monthly sales of existing homes, at over 38,000 for August, are below the 10-year monthly moving average of about 43,000. CREA expects a booming spring market if interest rates continue to drop as predicted. GDP Grows 0.2% GDP inched up just 0.2% month-over-month in July and a flat early estimate for August suggests Q3 growth will lag behind the BoC estimate of 2.8%. Lagging growth would encourage further interest rate cuts. The BoC has cut rates three times since June; their next meeting is in October. The goods-producing sector grew by 0.1%, driven by manufacturing and utilities. Overall, 13 out of 20 sectors expanded in July. Construction contracted 0.4% for the second month in a row and had the most impact on disappointing growth as most of its subsectors reported decreases. The services-producing sector grew by 0.2% in July, driven by retail services, finance and the public sector. GDP grew by 0.5% in Q2 following a 0.4% increase in the first quarter. Interest Rates Fall to 4.25% The Bank of Canada (BoC) cut interest rates by a quarter-point to 4.25% at the beginning of September. It was the third consecutive meeting that resulted in a rate cut. They said that if inflation continues to ease they are prepared to make further rate cuts to keep the economy moving forward. The central bank wants to see economic growth pick up to absorb the slack in the economy, which will allow inflation to return to their target of a sustainable 2%. Retail Sales Rise 0.9% Retail sales rose 0.9% in July to $66.4 billion after falling to $65.7 billion in June, according to Statistics Canada. Core retail sales, which exclude gasoline stations and fuel vendors and motor vehicle and parts dealers, rose 0.6% in July. In volume terms, retail sales rose 1.0%. Sales were higher in seven of nine subsectors, with sales at motor vehicle and parts dealers up 2.2% and a 2.3% increase in sales at new car dealers. Retail Ecommerce Sales Seasonally adjusted retail ecommerce sales were up 3.4% to $4.1 billion in July, accounting for 6.1% of total retail trade, compared with 6.0% in June, according to Statistics Canada. © Robert Bosch Tool Corporation. All rights reserved, no copying or reproducing is permitted without prior written approval.
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November 2024
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