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Unemployment Rises to 6.6% 
Consumer Prices Rise 2.5% The Consumer Price Index (CPI) rose 2.5% year over year in July after rising 2.7% in June, according to Statistics Canada. On a monthly basis, the CPI edged up 0.4% in July after declining 0.1% in June. This was a sharper rise than market consensus for a 0.3% monthly uptick. The BoC continues to forecast that inflation will drop to 2.5% in the second half of the year and return to the central bank’s target of 2.0% next year. Housing and Construction News Housing starts surged to their highest level in more than a year in July. The seasonally adjusted annual rate (SAAR) of housing starts increased by 16% in July, reaching 279,509 units, up from 241,643 units in June. The six-month trend in housing starts rose 3.2% from 247,840 units in June to 255,783 units in July, indicating a sustained upswing in construction activity. However, the outlook for housing development in Canada remains uncertain because builders are grappling not only with high costs and interest rates but also with declining demand for new homes, which could stall further development. Canadian home sales fell 0.7% in July after rising 3.7% in June but were up 4.8% from July 2023 after being down 9.4% year over year in June, according to the Canadian Real Estate Association (CREA). New listings were up 0.9% month over month. The actual national average home price in July was $667,317 down 0.2% from July 2023. The results came after the Bank of Canada cut its key interest rate in June, its first move lower since the early days of the pandemic in 2020. The central bank cut its key rate again on July 24. Falling mortgage rates are encouraging homeowners to refinance. The Mortgage Bankers Association’s (MBA) refinance index, which tracks home loan application volume, surged 16% last week from the previous week to its highest level in two years. Refinance applications were up nearly 60% versus the same week last year. Despite the lower borrowing costs, applications for loans to buy a home rose only 0.8% from the previous week and were down about 11% from a year earlier, according to the MBA. GDP Grows 0.5% GDP grew by 0.5% in Q2 2024 following a 0.4% increase in the first quarter. Meanwhile, GDP by industry was flat in June on the heels of a 0.1% increase in May, with a preliminary estimate of flat growth again in July. For the month of June, goods-producing industries were the main drag, with falling output in the construction and manufacturing industries driving the weakness. Service-producing industries grew by 0.1%, with the real estate, rental, and leasing and finance and insurance industries posting notable gains. Output in the wholesale trade industry, however, fell by 0.7% in June. Retail Sales Fall 0.3% Retail sales fell 0.3% in June to $65.7 billion after falling to $66.1 billion in May, according to Statistics Canada. The decrease was led by a 2% drop in sales at new car dealers, some of which can be blamed on a software glitch that kept sales from recording. Sales were down in four of nine subsectors, with discretionary categories like sporting goods/hobby/miscellaneous falling 0.8% and gas station sales edging down 0.5% as prices at the pump fell. Sales at housing-related retailers were weak and building material and furniture sales were down sharply year over year. Core retail sales, which exclude gasoline stations and fuel vendors and motor vehicle and parts dealers, rose 0.4% in June. Retail Ecommerce Sales Fall 2.4% Retail ecommerce sales fell 2.4% in June to $3.8 billion, accounting for 5.7% of total retail trade, compared with 5.8% in May. Retail ecommerce sales were down 3.6% to $3.9 billion in May, accounting for 5.9% of total retail trade, compared with 6.1% in April. Retail Notes Canadian Tire reported Q2 revenue fell to $4.13 billion from $4.26 billion last year. Consolidated comp sales were down 4.6% as shoppers continued to prioritize essential spending. Comp sales at Canadian Tire stores fell 5.6% compared with a year ago. Their Triangle Rewards loyalty members outspent non-members and eCTM redemption was up more than 8% over last year. CEO Greg Hicks noted that the program continues to grow and attracted more than 75,000 new members. CTR’s rollout of pickup lockers is now complete and implementing scan and go with electronic shelf labels is close behind. They continue to speed up buy-online, pickup in-store fulfillment, with many orders now being completed in less than an hour. They opened 18 refreshed or expanded CTR stores in the quarter. © Robert Bosch Tool Corporation. All rights reserved, no copying or reproducing is permitted without prior written approval.
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