{"id":6427,"date":"2018-04-20T12:48:09","date_gmt":"2018-04-20T16:48:09","guid":{"rendered":"http:\/\/lifeinsurance-orleans.ca\/Life-Insurance-Blog\/?guid=a38b99c1be1912937b9879b1ead2ab66"},"modified":"2018-04-20T12:48:09","modified_gmt":"2018-04-20T16:48:09","slug":"canadas-economic-engine-is-showing-early-symptoms-of-fatigue","status":"publish","type":"post","link":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/2018\/04\/20\/canadas-economic-engine-is-showing-early-symptoms-of-fatigue\/","title":{"rendered":"Canada\u2019s economic engine is showing early symptoms of fatigue"},"content":{"rendered":"<p>Canadian households, the main driver of the country\u2019s economy for the past decade, are showing signs of spending fatigue.<\/p>\n<p>An uptick of 0.4 per cent in retail sales matched expectations, but excluding automobiles they were flat, trailing the median forecast of a 0.4 per cent gain. Inflation also missed expectations, and the lacklustre figures sent the currency down for the third straight day.<\/p>\n<p>The data support the Bank of Canada\u2019s view of an economy that\u2019s slowing from an exceptionally robust period of growth last year. Friday\u2019s reports may also call into question how quickly policy makers led by Governor Stephen Poloz, who held rates steady this week, can raise borrowing costs back to more normal levels.<\/p>\n<ul class=\"related_links\">\n<li><a href=\"http:\/\/business.financialpost.com\/news\/economy\/recent-retail-sales-far-weaker-than-initial-estimates-revisions-suggest\">Canada\u2019s retail sales are far weaker than we thought<\/a><\/li>\n<li><a href=\"http:\/\/business.financialpost.com\/news\/economy\/why-poloz-just-got-bullish-on-how-fast-canada-can-grow\">Why Stephen Poloz just got bullish on how fast Canada can grow<\/a><\/li>\n<li><a href=\"http:\/\/business.financialpost.com\/news\/economy\/bank-of-canada-holds-key-interest-rate-at-1-25-per-cent\">Why the Bank of Canada is likely to raise interest rates again before summer<\/a><\/li>\n<\/ul>\n<p>\u201cThere are no red flags here,\u201d Benjamin Reitzes, a Canadian rates and macro strategist at BMO Capital Markets, said by phone from Toronto. The numbers are \u201cstill consistent with them going in July.\u201d<\/p>\n<p>The consumer price index climbed 2.3 per cent from a year earlier, the most since October 2014, Statistics Canada said from Ottawa. That lagged the consensus forecast of 2.4 per cent, and the monthly increase of 0.3 per cent also trailed expectations.<\/p>\n<p>Canada\u2019s dollar reversed gains after the release, and was down 0.4 per cent to C$1.2722 against its U.S. counterpart at 11:02 a.m. Toronto time. Futures trading showed the odds of an interest-rate increase at the central bank\u2019s May 30 meeting slipped to 39 per cent, from 45 per cent on Thursday. There\u2019s a 69 per cent chance of a July increase.<\/p>\n<p>\u201cThe deluge of data released today in Canada generally under-performed consensus expectations, but not by enough to alter the overall outlook for the economy,\u201d Royce Mendes, economist at CIBC World Markets in Toronto, wrote in a research note. \u201cThe underwhelming readings on prices will delay calls for an acceleration in Bank of Canada rate hikes.\u201d<\/p>\n<p>The 12-month pace of retail spending slipped to 3.5 per cent, well below the unsustainable 8.7 per cent of October. \u201cIt\u2019s still strong. It has softened,\u201d Nathan Janzen, senior economist at Royal Bank of Canada, said by phone from Toronto.<\/p>\n<p>The numbers suggest enough slack remains in the economy to prevent a surge in inflation, at least for the time being, bolstering the central bank\u2019s view. Stripping out a 17 per cent gain in gasoline prices the inflation rate was 1.8 per cent, unchanged from February, and the average of the Bank of Canada\u2019s three preferred core measures was little changed at about 2 per cent in March.<\/p>\n<p><a href=\"http:\/\/www.bloomberg.com\/\"  rel=\"noopener\">Bloomberg.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Lacklustre data out today sends Canadian dollar down for third day in row<\/p>\n","protected":false},"author":578,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[],"tags":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/6427"}],"collection":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/users\/578"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/comments?post=6427"}],"version-history":[{"count":0,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/6427\/revisions"}],"wp:attachment":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/media?parent=6427"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/categories?post=6427"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/tags?post=6427"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}