Weekly Economic Watch‏

– The consumer price index was flat in November, causing the year-on-year inflation rate to rise just two ticks to 0.9% (from 0.7%). In seasonally adjusted terms, CPI rose 0.2%, as five of the eight broad categories saw price increases. Price gains for clothing/footwear (+0.3%), food (+0.2%), shelter (+0.5%), recreation/reading (+0.1), alcohol/tobacco (+0.1%) more than offset the decline for transportation (-0.6%). Prices for household ops and health/personal care were flat. The core CPI, fell 0.1% taking the year-on-year rate down one tick to 1.1%. In seasonally-adjusted terms, core CPI was flat.

Retail sales fell 0.1% in October. But sales dropped in just 4 of the 11 subsectors. Auto sales fell 1.9% after strong gains in prior months. Excluding autos, sales were much better, rising 0.4%. Gains in sales of electronics, building materials, food/beverage, health/personal care products, clothing and general merchandise, more than offset declines in sales of gasoline, sporting goods, and furniture/home. Five of the 10 provinces saw declining sales in October. Alberta continues to lead the nation with retail sales up 6.6% from last year. In real terms overall retail sales rose 0.2%, the fourth increase in a row.

Manufacturing shipments rose 1% in October (on top of the prior month’s 0.6% advance), easily beating consensus which was expecting a drop of 0.3%. In October, 13 of the 21 industries posted higher sales, including a notable 6.9% increase in food manufacturing, and a 2.8% advance in sales of chemicals. Those more than offset declines in sales of transportation equipment (e.g autos and aerospace equipment), machinery, petroleum and coal products, and electrical equipment. In real terms, factory sales rose 1%. Real inventories jumped 2% in October, causing the real inventory-to-sales ratio to rise one tick to 1.43. Real orders jumped 5.5%.

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