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Odds and ends in Canadian economic statistics



We’re in the quiet zone, some data is coming out but no real identifiable trend is emerging.

Interest Rates remain unchanged

The Bank of Canada once again decided to remain on the sidelines.  The BoC said: 
Although recent economic activity in Canada has been stronger than the Bank had anticipated, the profile is largely consistent with the underlying dynamics outlined in the January MPR.  Aggregate demand is rebalancing toward business investment and net exports, and away from government and household expenditures.

In other words the BoC is happy that industry is spending and that consumers are “holding back” a little.  There is still tremendous concern about the level of Canadians 'indebtedness.  

Inflation Expectations are rising

Input costs have been rising for more than a year.  Most Canadian companies are seeing their margins being squeezed and are looking at price increases – that would result in higher inflation in Canada (still below the BoC’s upper target range of 4% -- still).  Again this is not driven principally by wage inflation but material input costs.  There’s not much the BoC can do about those.

Employment growth:

In March, Canada lost 1,000 jobs!  As I’ve said before the underlying trend is more interesting, as 92,000 permanent jobs were created and 93,000 part time jobs were lost.  Quebec hit a speed bump, and saw a 14,000 job decrease – while Ontario saw a 5,400 job increase (I missed that one, it was a reminder from a reader!).

Merchandise Trade Surplus sinks to zero

OK, maybe not zero, but $33 million is hardly huge after the $1 billion registered in January.  It would seem that the car industry here is to blame, as is lower fuel exports.

Oil Prices

Gyrating between $105 and $112/bbl in the space of three days, tells you nothing, except that there are lots of upside open interest contracts out there (and some margin calls that caused a rapid price deceleration).  Predicting oil prices is a mugs game.  However, the EIA came out yesterday with its projections for demand and supply, and whole the excess capacity is not the same scope as it was in 2008 (1 million/bbl/day) it is still contracting from 3.6 to 3.1MM/bbl/day.  Short term demand elasticity is very low (very difficult to change short term consumption patterns).  Obviously Libya 750,000/bbl/day is the reason for the contraction, again war zones (Iraq and Libya) are at the centre of the supply/demand balance.  

U.S. Retail Sales meet targets, almost!

The more interesting news this morning was the U.S. retail sales numbers which showed a decelerating economy, although adding back car sales to the number showed a relatively good performance – at least until you realize that the car numbers include fuel purchase…and there the 16% YoY price increase may have something to do with this “strong” performance.

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