Economics Newsletter – Nov 17, 2023

New UWES articles, CPI data, and more!

Written By: Benjamin Pipicelli, Lexx Thomson, Dorje Gyaltsen, & Gordon Huynh

Economics Newsletter – November 17, 2023

Canada’s Economy at a Glance


Author’s Commentary

U.S Retail Sales

An autumn chill appears to have slowed down the US consumer a touch with October retail sales growth moderating in line with consensus expectations. The control group of retail sales which feeds into non-auto core goods consumption in GDP rose by 0.2% month over month (m/m), after a scorching 0.7% increase in September. However, the prior month was also revised up one tick. Total retail sales decreased by 0.1% m/m, coming in above expectations of a 0.3% drop in spending in October. Combined with yesterday’s CPI flat reading for core goods categories ex autos, this implies another monthly increase in real spending and strong momentum for consumption in 23Q4 which we are tracking at about 2% annualized, including with today’s data. However, expect the monthly pace of consumption to not accelerate much from here with the labour market rebalancing showing further progress, excess savings mostly having dwindled and student loan repayments starting to bite.

News and Noteworthy

‘A scandal’: Bombardier CEO calls for open bidding process to replace military jets

Bombardier chief executive Eric Martel continued to push Ottawa to consider its planes for a new military contract this week, telling a government committee that it would offer a cheaper option than rival Boeing and would create 22,000 jobs in Canada. The Canadian government is set to spend billions on new reconnaissance aircraft to replace the military’s aging fleet of CP-140 Aurora maritime patrol planes. Read more.

Gas prices: Declines in Canada accelerate, led by the GTA and Maritimes

Gas prices fell at a sharper pace this week in Canada, led by steady declines across Ontario’s largest cities and the Maritimes. Sarnia, Ont. stood out once again as the most volatile region for the average price of regular gasoline, booking a 14.3 cent per litre drop between Nov. 2 and Nov. 9. The Canada-U.S. border town has seen prices whip-saw in recent weeks. Read more.

Loblaw investing to combat ‘organized retail crime’ that is ‘significant problem’

Loblaw (L.TO) says higher theft drove down margins at Shoppers Drug Mart, but the company is continuing to invest and work with law enforcement to address the impact of what it calls “organized retail crime.” The grocery retail giant’s chief financial officer Richard Dufresne says the company saw “sequential improvements” in its most recent quarter when it came to shrink, which is when a company loses inventory due to factors including theft, product damage and fraud, among others. Read more.

Ask the Expert: What you need to know as a first-time home buyer

Canada’s housing affordability is falling further out of reach for many would-be buyers, but for those looking to buy a home in today’s market, experts say some steps can help you get closer to that goal. Read more.

Tim Hortons a bright spot for RBI as it misses sales expectations, stock falls

Tim Hortons remains a bright spot for parent company Restaurant Brands International (QSR) (QSR.TO), even as the company reported quarterly financial results that missed sales expectations, dragging the stock down as much as 6 percent on Friday. Sales at RBI, which operates Tim Hortons as well as Burger King, Popeyes and Firehouse Subs, reached $1.84 billion in the third quarter of the year, below the $1.87 billion forecast by analysts, according to Refinitiv IBES data available on Yahoo Finance. Read more.

Economics Society News, Events, and Articles

– Keep an eye out on our Instagram page @uweconsoc for updates regarding future events

– Our weekly Economics Study Lounge has begun! Come to HH2034 Project Cube every Thursday from 6:30-7:30 pm!

– Check out our most recent original article, “What’s at Stake Between Canada and India”, written by Finn O’Connor

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