How has the pandemic impacted economic activity will be in focus this week, as provinces continue to allow businesses to reopen while attempting to tamp down outbreaks of the coronavirus. But this week, there will be a few new yardsticks to measure these metrics.
COVID And CPI
The first one comes today as Statistics Canada releases its look at the effects on consumption trends on the Consumer Price Index.
The CPI measures the rate of average price changes for all goods and services used by consumers in the country. It is also the indicator commonly referred to that tracks inflation.
Last month, StatsCan said the inflation rate had dropped 0.4% compared to the same month in 2019. It was also down 0.2% from April, mostly due to the drop in gasoline prices.
If gasoline prices were excluded from the measure, however, CPI increased in May by 0.1%. Food prices jumped 3.1% in May, the largest year-over-year increase among the major components measured.
COVID And Business Concerns
Another StatsCan report is due out Tuesday that will look at the impact the COVID-19 pandemic has had on businesses. The data is expected to add insight to what is widely seen as a bad situation.
Last week, the Bank of Canada offered its look on how business operators are dealing with the economic slowdown due to the pandemic. The report painted a picture of uncertainty and restraint, with a high number of business leaders surveyed holding back on rehiring and ramping up purchasing. Only half of all businesses surveyed claimed they expected to see sales figures rebound in the next 12 months.
BoC Interest Announcement Due
On Wednesday, the Bank of Canada will make its interest rate announcement. It is widely expected that the central bank’s key lending rate will remain untouched at 0.25%.
What investors will want to keep an eye on is the bank’s monetary policy report, which will include an updated economic outlook. That could set the tone for what is to come in both the short and long term.
Housing Figures Due Wednesday
Also Wednesday, the Canadian Real Estate Association will release its statistics for June.
The number of home sales for that month is expected to be up from May levels as housing continues along a rebounding trend.
Last month, although sales were up a record-setting 56.89% compared to April, the month of April marked an all-time low, as sales just about dried up due to the pandemic. Sales in May were almost 40% below what they were in May 2019.
Manufacturing Figures Expected
And to round out the data being released on Wednesday will be manufacturing sales figures for the month of May.
The Statistics Canada report for April recorded a drop in sales, the first full month of economic shutdowns and stay-at-home orders.
It is expected that the May numbers will be slightly better, but still below last year’s levels.