Canadian Weekly Review: November 24, 2023

by Charles Hong, Happysona Principal Economist

Consumer Price Index (CPI) — October 2023: A Subtle Downward Trend

• In October 2023, the Consumer Price Index (CPI) exhibited a slight increase of 0.1% month-on-month, according to non-seasonally adjusted data. However, when considering the seasonally adjusted data, the CPI saw a marginal decrease of 0.1%, marking the first monthly decline since May 2020.
• The housing sector, particularly rent costs, continued to exert upward pressure on the overall CPI. In contrast, there were notable price decreases in clothing and footwear, and transportation sectors.
• Year-on-year, the total CPI inflation showed signs of deceleration, dropping to 3.1% from the 3.8% recorded in September. This slowdown in the annual rate was primarily driven by a significant reduction in gasoline prices, which fell by 7.8% year-over-year. Additionally, there was a 1.2% year-over-year decline in household operations, furnishings, and equipment. Excluding the impact of gasoline, the CPI’s year-over-year increase was 3.6%, which is a slight decrease from the figure observed in the previous month.

Real Retail Trade Dynamics — September 2023: A Modest Rebound

• After a three-month downward trend, total real retail sales in September showed a modest recovery, registering a 0.2% increase month-on-month.
• This uplift in sales was predominantly driven by motor vehicle and parts dealers, especially new car dealers. In contrast, core retail sales, which exclude gasoline stations and motor vehicle and parts dealers, experienced a marginal decline of 0.2%.
• In nominal terms, the 0.6% overall increase in retail sales indicates varied pricing effects across different subsectors. Notably, there were significant price increases in building materials and garden equipment, motor vehicle and parts dealers, and gasoline stations.

Upcoming Economic Indicators Release

Statistics Canada is scheduled to release several key economic reports during the week of November 27 to December 1. These include the real GDP results for August and the third quarter, as well as the employment report for November. These publications will provide valuable insights into the current state of Canada’s economy.

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