This week’s episode - week ending January 13, 2017
Canadian housing starts grow in december
Canadian housing starts rose a seasonally adjusted 207,000 units annualized in December, up from 187,300 in the prior month, as both single and multi-units advanced.
Helped by December’s double-digit gain, 2016 marked the third-straight year of growth in housing starts. Ontario led the gains, while Alberta lagged, posting the province’s lowest annualized total since 2009.
In a separate release, building permits were little changed in November, declining 0.1% to $7.8 billion, though offset by a gain in the non-residential sector.
U.S. Consumer spending rises, led by auto sales
U.S. consumer spending moved higher in December, increasing by 0.6%, continuing an upward trend supported by job growth, wage gains and anticipated tax cuts from the Trump administration.
The auto industry led the gains with a 2.4% month-over-month increase, capping a record year for motor vehicle sales.
Core sales, after removing automobiles, gasoline and building materials, rose only 0.2%, missing expectations. Still, supported by the prior two months, fourth-quarter 2016 totaled 3.6% annualized growth.
Chinese inflation ticked up by 0.2% in December, bringing annualized CPI to 2.1%. Pork prices drove the increase, as they rose by 6.2% from a year earlier.
Core CPI, a less volatile measure, increased to 1.9% year-over-year and is approaching 2%, a level not reached in over five years.
December’s trade balance was largely underwhelming as exports fell sharply, while imports slowed. Exports fell 6.1% annualized in U.S. dollar terms, following an increase in the prior month. Imports fell as well, down 3.1% from a year ago, despite the highest monthly total on record of incoming crude oil.
Other Economic News
A record monthly jump in the NBIF Small Business Optimism Index led to its highest level in twelve years. With small business being the largest driver of jobs, U.S. employment appears healthy, further evidenced by the Job Openings and Labour Turnover Survey, or JOLTS, increasing more than expected to 5.5 million in November.
President-elect Donald Trump held his first press conference since winning the election. The majority of his comments were spent denouncing unverified reports of his ties to Russia and personal allegations, as well as transition plans for the Trump business after taking office.