Weekly Economic Report
October 20, 2014
Canadian CPI Trims Annual Inflation Rate Canadian Consumer Price Index - September Canadian consumer prices rose just 0.1% in September to bring the annual inflation rate down a tick to 2.0% from 2.1% in the prior month. Meat prices rose another 1.5% in the month, now up a towering 11.5% y/y, the fastest rise since the mid-1980s. This factor alone has lifted the annual core inflation rate by 0.3%. The CPI report also shows core inflation a tad above headline trends, a feature that looks likely to persist for some time. The main message from the report is that the recent run in core inflation to just over 2% looks to stay with us for a while yet.
U.S. Housing Started Up Again
U.S. Industrial Production Recovers
U.S. Housing Starts and Building Permits - September
U.S. Industrial Production and Capacity Utilization - September
Starts rebounded 6.3% in September to 1,017,000 units annualized. The move itself beat consensus, as did the level. This recovery was helped by a 1.1% rise in single-family homes and a 16.7% rise in multi-unit complexes.
Production jumped 1.0% in September, the 7th gain in the past eight months and doubling expectations. This is the largest rise since November 2012 and was broadly based across most industries except, rather surprisingly, autos. Of the three sectors that make up total production, they were all higher – manufacturing (+0.5%), mining (+1.8%) and utilities (+3.9%).
Building permits also bounded back in September, but the 1.5% rise to 1,018 million units was below expected. Since the level of permits matched the level of starts, this suggests that it will be challenging for starts to move decisively higher in the near term. This is another piece of good U.S. economic news that serves as a reminder that nothing has fundamentally changed in the economy over the past week.
U.S. Jobless Claims Fall to 14-Year Low The number of new claims for jobless benefits fell to a 14-year low last week, the latest sign of an improving labor market, down 23,000 to a seasonally adjusted 264,000. That was below the 290,000 claims forecast and the lowest level since the week of April 15, 2000.
Important Economic Statistics
The Week Ahead Canadian Wholesale Trade – August - Monday, October 20, 2014 at 8:30am
United States Existing Home Sales – September - Tuesday, October 21, 2014 at 10:00am
Canadian Retail Sales – August - Wednesday, October 22, 2014 at 8:30am
United States Consumer Price Index – September - Wednesday, October 22, 2014 at 8:30am
Ronald Chow, Chief Economist • ronaldchow@crescentschool.org