A Mixed Bag of U.S., Canadian and Brazilian Data Releases Today

September 14, 2010


  • Labor productivity fell 0.8% last quarter, the most in over 2-1/2 years and the first drop in three quarters.  Canadian productivity growth has been no match for its U.S. counterpart, averaging 0.6% per annum in the five years to 2009 versus a 1.7% per annum pace of rise in U.S. productivity over that span.  In the year between 2Q09 and 2Q10, labor productivity rose 0.8%, while U.S. productivity leaped 3.7%.
  • The Canadian-U.S. disparity in unit labor costs was augmented further by exchange rate movements.  Translated into U.S. currency, Canadian unitl labor costs soared 13.7% in the year to the second quarter of this year versus a 2.8% drop in U.S. unit labor costs.  Previously, USD-denominated unit labor costs advanced 33.7% or 6.0% per annum in Canada between 2004 and 2009.  By comparison, U.S. unit labor costs went up 8.2% or 1.6% per annum.  Canadian export competitiveness has struggled as a result.
  • Capacity utilization in Canada rose to 76.0% in 2Q10, the fourth increase in a row.  However, only about half of the 15 percentage point drop between 1Q07 (83.1%) and 2Q09 (68.1%) has so far been reversed.
  • A 2.4% jump in new motor vehicle sales in July was 2-1/2 times greater than forecast.


  • Retail sales, up 0.4% in August, were marginally better than expected, but the on-year increase of 3.6% was less than July’s 5.4% and June-August’s 4.7%.
  • Weekly chain store sales figures imply a mediocre back-to-school shopping season.
  • Business inventories grew 1.0% in July, twice as much as generally forecast.
  • The IBD/TIPP optimism index rebounded to 45.3 in September after weakening to 43.6 in August from 44.7.
  • Small business sentiment picked up in August to 88.8 from July’s 88.1 reading but remained low viewed from a pre-recession perspective.


  • Retail sales expanded only half as much as projected in July, climbing by 0.4%.  This news follows data that real GDP growth was halved to 1.2% in 2Q (5.1% annualized) from an unsustainable 2.7% in 1Q.  On-year growth had barely slowed to 8.8% from 9.0% in the first quarter.  On-year growth in investment of 26.5% had been the most in at least 14 years and had outpaced the 6.7% increase of personal consumption.  Brazil has Latin America’s largest economy.  Readers interested in learning more about the state of the Latin American economy might want to check out this week’s Economist, which carries a 14-page special supplementary report on the region.  Observing average annual GDP growth in Latin America of 5.5% with sub-10% inflation during the five years to 2008, the report strikes an upbeat tone attributable to the rewards of structural reforms adopted quite some time ago, but it cautions that not all countries have taken this path and that progress could yet be squandered.

Copyright Larry Greenberg 2010.  All rights reserved.  No secondary distribution without express permission.

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