Weekly Economic Indicators – U.S. and Canada

Weekly Economic Indicators – U.S. and Canadaeekly Economic Indicators – U.S. and Canada
For the week of April 15, 2013 (Market calls are as of April 11, 2013)For the week of April 15, 2013 (Market calls are as of April 11, 2013)
RBC Economics Research contact:
Paul Ferley, Assistant Chief Economist
RBC Economics Research contact:
Paul Ferley, Assistant Chief Economist
(416) 974- 7231 paul(416) 974- 7231 paul.ferley@rbc.com
Tom Porcelli, U.S. Market Economist
(212) 618-7788 tom.porcelli@rbccm.com
Monday, April 15
U.S. Economic Data and Events
Time Release RBC Call Market Call Prior Read
8:30 Empire Manufacturing Apr 4.00 6.65 9.24
9:00 Total Net TIC Flows Feb $110.9B
9:00 Net Long-term TIC Flows Feb $25.7B
10:00 NAHB Housing Market Index Apr 45 45 44
11:00 U.S. Fed to Purchase Notes
11:30 U.S. to Sell 3-Month Bills
11:30 U.S. to Sell 6-Month Bills
Canadian Economic Data and Events
9:00 Existing Home Sales MoM Mar -2.10%
Tuesday, April 16
8:30 Consumer Price Index (MoM) Mar -0.1% 0.0% 0.7%
8:30 CPI Ex Food & Energy (MoM) Mar 0.2% 0.2% 0.2%
8:30 Consumer Price Index (YoY) Mar 1.6% 1.7% 2.0%
8:30 CPI Ex Food & Energy (YoY) Mar 2.0% 2.0% 2.0%
8:30 Housing Starts Mar 925K 930K 917K
8:30 Housing Starts MOM% Mar 0.9% 1.9% 0.8%
8:30 Building Permits Mar 945K 939K
8:30 Building Permits MOM% Mar 0.6% 3.9%
9:15 Industrial Production Mar 0.3% 0.3% 0.8%
9:15 Capacity Utilization Mar 78.4% 78.4% 78.3%
11:30 U.S. to Sell 4-Week Bills
12:00 Fed's Duke Speaks to Bankers in Washington
15:30 Fed's Kocherlakota Speaks in Minneapolis
In February consumer prices jumped 0.7%. This largely reflected gasoline prices spiking 9.1% higher in the month with food prices up
only 0.1% and core prices rising 0.2%. Advance indications are that gasoline prices retraced about one-half of February’s surge and
likely declined 4.6% in March. Increases in the food and core components in March of 0.1% and 0.2%, respectively, will not fully offset
this drop resulting in the overall CPI edging lower 0.1% in the month. This contributes to the year-over-year rate dropping to 1.6% from
2.0% in February. The annual increase in core prices remains unchanged at 2.0%.

In February, housing starts rose a modest 0.8% to an annualized 917K with singles up 0.5% to 618k and multiples rising 1.4% to 299K.
Looking ahead to March, the 3.9% jump in February permits to 939K would suggest greater strength in new housing construction.
However, we are assuming a colder-than-normal March will limit the strengthening resulting in starts only rising 0.9% to 925K. The
increase is expected to largely reflect multiple units rising 3.7% to an annualized 310K that will more than offset the larger singles
component declining 0.5% to 615K.
Industrial production (IP) jumped 0.8% in February with strength relatively broadly based. Specifically, manufacturing output rose 0.6%
with utilities up 1.6% and mining up 0.9%. Looking ahead to March, early indications are for a more mixed picture. The March payroll
employment report indicated that aggregate hours for the manufacturing sector dropped 0.3% in the month after a 0.7% increase in
February; however even though the ISM manufacturing measure for March moved lower as well to 51.3 from 54.2 in February it
remained above the “50 mark” indicating rising production in the sector. As a result, we tempered the weakness implied by the payroll
employment report and are assuming a relatively negligible 0.1% drop in the manufacturing component of IP. The aggregate hours
measure for the mining sector indicated greater weakness with the measure declining 0.3% following a 1.5% rise in February. This is
expected to be mirrored in the mining component of IP dropping 0.1% after February’s surge. Breaking with the pattern for those two
sectors, a surge in electricity usage in March will be reflected in a 4.0% jump in utilities output in the month following a 1.6% gain in
February. This increase will allow overall IP to still manage to increase in the month though the 0.3% gain will be smaller than
February’s 0.8% overall increase. A rise of this magnitude is expected to send the March capacity utilization rate up to 78.4% from
78.3% in February.
8:30 Manufacturing Sales MoM Feb 1.8% -0.2%
8:30 Int'l Securities Transactions Feb 13.34B
After a 0.2% drop in January, manufacturing sales are expected to jump 1.8% higher in February. This mainly reflects indications that
auto production surged more than 10% in the month after a 6% decline in January. As well, we are assuming that aerospace output in
February will rise 16% to partially reverse the plummet the previous month. These increases are expected to contribute to the durables
component of overall manufacturing sales rising 2.5% following the 0.7% drop in January. Strength is also expected in the non-durables
component which is projected to be up 1.1% following a 0.3% rise in January although much of the nominal increase will reflect rising
energy prices. On a volumes basis, we are assuming a 1.2% monthly increase in overall manufacturing sales.
Wednesday, April 17
7:00 MBA Mortgage Applications 12-Apr 4.5%
9:30 Fed's Bullard Speaks in New York
12:00 Fed's Rosengren Speaks in New York
14:00 U.S. Federal Reserve Releases Beige Book
9:00 Teranet/National Bank HPI MoM% Mar -0.20%
9:00 Teranet/National Bank HPI YoY% Mar 2.70%
9:00 Teranet/National Bank HP Index Mar 152.72
10:00 Bank of Canada Rate 1.00% 1.00%
10:00 Bank of Canada releases Monetary Policy Report
11:15 Bank of Canada Governor Carney Gives Press Conference
With no expectation of any change to the current 1.00% overnight rate, attention will be focussed on the Bank of Canada’s
characterization of the economy and thus hints about any future policy move. Any revisions to the economic outlook will likely be
alluded to in the statement issued following the conclusion of the meeting with greater detail provided in the simultaneous release of the
Monetary Policy Report. Our expectation is the GDP growth in the first and possibly second quarters will both be revised modestly

lower by 0.3 to 0.4 percentage points. In January the central bank projected increases of 2.3% and 2.7% for Q1 and Q2, respectively.
Any downward revision could be attributed to indications of declining employment through the first quarter. As well, the uncertainty of
the impact of the forced U.S. public sector expenditure reductions, i.e., sequestration, that were initiated March 1st
, may also have
weighed on growth. However, we are not assuming that these revisions will be material enough to alter the stance of policy. This
implies not only maintaining the overnight rate at 1.00% but also likely reiterating the so-called tightening bias. In the March 6
statement, the central bank allowed that at some point a “modest withdrawal of liquidity will likely be required” though with the
qualification that “the considerable monetary policy stimulus currently in place will likely remain appropriate for a period of time.”
Thursday, April 18
8:30 Initial Jobless Claims 13-Apr 355K 346K
8:30 Continuing Claims 06-Apr 3091K
9:00 Fed's Kocherlakota Speaks in New York
9:30 Fed's Lacker Speaks on Credit in Charlotte, North Carolina
9:45 Bloomberg Economic Expectations Apr -4
9:45 Bloomberg Consumer Comfort 14-Apr -34
10:00 Philadelphia Fed. Apr 0 3.3 2
10:00 Leading Indicators Mar 0.1% 0.5%
12:00 Fed's Raskin Speaks in New York
13:00 U.S. to Sell 5-Year TIPS
13:00 Department of State Meeting on Keystone XL Pipeline, Grand Island, Nebraska
11:00 Bank of Canada’s Carney Gives Interview in Washington
Friday, April 19
12:00 Fed's Stein Speaks on Credit Markets anaemic in Charlotte
8:30 Consumer Price Index MoM Mar 0.2% 1.2%
8:30 Bank Canada CPI Core MoM Mar 0.2% 0.8%
8:30 Consumer Price Index YoY Mar 1.0% 1.2%
8:30 Bank Canada CPI Core YoY Mar 1.4% 1.4%
8:30 Wholesale Sales MoM Feb 0.9% 0.3%
The February consumer price report showed a sizeable monthly increase of 1.2%. Part of the pressure resulted from gasoline prices
soaring 8.4% in the month following four months of declines. However, core prices also applied some upward pressure rising 0.8%
reflecting in part some larger-than-normal seasonal increases with clothing prices, for example, jumping 4.0% in the month. Upward
pressure also emanated from motor vehicle prices offsetting some weaker-than-expected numbers late last year. For March, we are
assuming significantly less monthly price pressure. In part this reflects indications that gasoline prices held steady in the month.
However, we are also assuming that the clothing component will show a much more moderate gain in March following the over-stated
increase in February. Some offset is expected from greater pressure in meat prices reflecting the delayed impact of rising feed costs
from the summer drought in the US being partly passed along to consumers. This is expected to result in both the overall and core
measures rising 0.2% in the month with the year-over-year rate for the overall CPI dropping to 1.0% from 1.2% in February and the
annual increase in core prices remaining steady at 1.4%.

Wholesale trade rose 0.3% in January as a strong bounce back in machinery and equipment sales (+3.2%) was largely offset by a
decline in the motor vehicles component (-2.8%). In February we expect motor vehicles to more than retrace January's weakness as
Canadian auto production was up more than 10% in the month. Additional strength is expected in the building materials and supplies
component following a 0.8% decline in January. Solid growth in these two components, along with fairly steady readings in other
sectors, should result in wholesale trade growth of 0.9% in February, with volumes rising 0.8% in the month.

Weekly Economic Indicators – U.S. and Canada

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