North American Data Round-Up
November 30, 2011
November ended in a flurry of good North American data cheer. Prior to today, investors learned of much stronger-than-forecast on-year growth in holiday retail sales during the post-Thanksgiving weekend. Yesterday’s news that the Conference Board gauge of U.S. consumer confidence had jumped 15.1 points to 56.0 in November, best since July, added to the festive mood, but even better news arrived today.
The ADP estimate of private U.S. jobs rose 206K last month, 65% better than forecast and the largest monthly increase so far this year.
U.S. pending home sales, a harbinger of existing home sales, shot up 10.4% last month, easily offsetting September’s drop of 4.6% and far surpassing a predicted increase of 1.5%.
Midwestern PMI scores brought more good tidings. The Chicago factory purchasing managers index jumped 6.2 points to a seven-month high of 62.6 in November, and the Milwaukee PMI rose 1.2 points.
Revised data showed a good mix last quarter of 2.3% growth in labor productivity and a 2.5% decline in unit labor costs. Both figures were improvements upon the trends seen in the first half of 2011.
Canadian real GDP, which had contracted 0.5% at a seasonally adjusted annual rate in the second quarter, advanced by a respectable 3.5% in 3Q. The Bank of Canada’s October Monetary Policy Report had penciled in just 2.0% growth for the quarter, followed by a mere 0.8% in 4Q11. On-year GDP growth was 2.4% in 3Q and averaged that same amount in January-September. The personal consumption and GDP price deflators each increased 0.3% (not annualized) in the latest reported quarter, and they were respectively 2.0% and 3.4% higher than in 3Q10.
The composition of Canadian third-quarter growth was surprising and seemingly unsustainable. Net exports enhanced the annualized growth rate of real GDP by 5.2 percentage points (ppts). Monetary officials expect just 0.2 ppts of growth from net foreign demand in 2012 because of the bleak global outlook and elevated Canadian dollar. Canada’s current account, reported on Tuesday, narrowed to CAD 1.21 billion in 3Q from CAD 1.61 billion in 2Q. As a share of GDP, such equaled 2.9%, very near to the 3.0% ratio for January-September and the ratios of 3.0% in calendar 2009 and 3.1% in 2010. Public-sector demand was a completely neutral factor in Canada last quarter, while inventories and the statistical discrepancy exerted a 2.8-ppt drag on the GDP growth rate. Among components of private domestic demand, persona consumption increased only 1.2% annualized, while residential and non-residential investment rose 10.9% and 10.5%. Despite those solid advances, private domestic demand augmented the GDP growth rate by a shade less than one percentage point.
Canadian September GDP compiled from the supply side was also reported today. Output went up 0.2% after back-to-back 0.4% increases in July and August. On-year growth was 3.0% and 5.2% in the case of industrial production, which also registered a solid 0.6% increase in September. A 0.7% increase in retail sector activity after a 0.4% monthly gain in August offered further encouragement.
Canadian producer prices dipped 0.1% in October and slowed to a 12-month increase of 4.7% from 5.4% in the year to September. Raw material prices for items other than mineral fuels sank 2.9% on month, and the total raw material price index fell by 1.2% in October. In on-year terms, raw material price inflation slowed to 11.3% from 15.1% in September.
Stock prices are rallying strongly. The DOW, which fell 7.5% between November 8 and November 23, has subsequently advanced 10.6%. At 11980 currently, that index shows a slim 0.2% net uptick since the end of October. A week ago, a month-end to month-end increase had seemed completely out of reach.
Copyright 2011, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
ShareThis
