Weekly Economic Update

For the week of October 9 – 12.

It will be a quieter week for data in both Canada and the United States this week. Scheduled releases in Canada include housing starts, building permits, and new housing price index. Scheduled releases in the United States include consumer prices on Thursday, which will be watched carefully. Prices on a headline basis are expected to have increased by 0.2 and 2.4 percent on a month-over-month and year-over-year basis respectively. Excluding food and energy, growth levels are sitting at 0.2 and 2.3 percent respectively.

Employment data exceeded the expected 25.0K on a headline basis, rising by 63.3K. Although part-time positions jumped way higher by 80.2K, full-time positions actually dropped by 16.9K. Wage growth dropped to a level of 2.2 percent from 2.6 percent for permanent employees. As expected overall, the unemployment rate dropped to 5.9 percent.

Nonfarm payrolls data missed expectations for 185K jobs, landing instead at 134K. Hurricane Florence is one of the main factors for the lower than expected release. Despite the miss on the headline figures, the unemployment rate dropped further than expected to 3.7 percent, a shocking 48-year low. Lastly, August’s nonfarm payroll was revised from 201K to 270K.

Both US and Canada government yields are trading flat to 1bps higher with S&P futures lower (-14.5). WTI crude oil is trading higher this morning at $74.71. The Canadian dollar is weaker against the US dollar for the sixth straight session. Today’s expected range is 1.2946 – 1.3046.

Source: Bloomberg

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