Manufacturing sales seen up 4.6%, retail up 0.6%. Population decline skews per-capita GDP. US retail sales details watched for gasoline squeeze on spending.
Alpha Score of 23 reflects poor overall profile with poor momentum, poor value, moderate quality. Based on 3 of 4 signals – score is capped at 90 until remaining data ingests.
April's manufacturing and wholesale reports Monday and retail sales Friday should back the Bank of Canada's view that growth resumed in the second quarter after a first-quarter contraction.
Statistics Canada's advance estimate pegs manufacturing sales up 4.6% and retail sales up 0.6%. Higher petroleum prices push part of those gains. After stripping out that effect, manufacturing sales volume still looks about 3% higher. So far high gasoline prices do not appear to be crowding out retail spending elsewhere.
Wholesale sales excluding petroleum held onto earlier strength. March nominal wholesale sales rose 1.9% (1.7% real), and April likely followed a similar path. Home resales in May point to further stabilization in housing markets. Some of the most depressed larger cities, like Toronto, are showing early green shoots.
The advance monthly production estimates have been volatile and less reliable than usual for gauging quarterly GDP growth. Headline GDP and employment data also remain heavily influenced by population swings. Wednesday's quarterly demographic estimates are expected to show a third consecutive population decline in the first quarter. The pool of non-permanent residents is shrinking quickly. Recent softer GDP numbers would look better on a per-capita basis because of that decline.
Diverging macro trends between Canada and the U.S. continue to show a stronger U.S. economy requiring the Federal Reserve to keep rates higher than the BoC. AlphaScala's base case holds that both central banks stay on the sidelines this year. The FOMC is expected to hold the Fed Funds rate steady Wednesday. New Governor Kevin Warsh will preside over his first meeting after taking office in May. The Fed has moved further away from a cutting bias toward a neutral stance. U.S. labour market reports surprised to the upside consecutively. Headline U.S. inflation has also risen on surging gasoline prices and sticky core inflation.
Consensus expects May U.S. retail sales to have risen. Details will be closely watched for signs that higher gasoline prices are beginning to squeeze spending on other products. Consumer spending has remained resilient through a drawdown in savings that is not sustainable. Vehicle sales rose in May, and control sales excluding gasoline, auto purchases, and building materials probably edged up 0.3%.
The stabilization in housing markets supports consumer confidence and spending. The shrinking non-permanent resident pool tightens the labour market, pushing up wages. For traders watching forex market analysis, the data flow supports a view that the BoC will hold rates steady while the Fed remains on hold. That keeps the rate differential between Canada and the U.S. stable in the near term. The Fed's neutral stance reduces the probability of a rate cut this year, which supports the dollar and caps CAD gains. U.S. retail sales data due next week will show whether that pattern holds.
Prepared with AlphaScala research tooling and grounded in primary market data: live prices, fundamentals, SEC filings, hedge-fund holdings, and insider activity. Each story is checked against AlphaScala publishing rules before release. Educational coverage, not personalized advice.