Economic news to watch this week

Ontario’s new Progressive Conservative government will make its first major announcement Thursday on the direction of the province’s finances when Finance Minister Vic Fedeli delivers the fall economic update.

The statement will provide a glimpse into the government’s budget, revealing spending plans as well as the province’s deficit. That figure has been contested after a report commissioned by the government put the deficit at $15 billion, or $8 billion more than the previous Liberal government forecasted in its March budget.

Premier Doug Ford’s government hasn’t provided a timeline for a balanced budget, a plank in the June election campaign.

Fiscal updates can also contain policy nuggets relevant to the investment community. Last year, then finance minister Charles Sousa indicated plans for legislation to regulate financial planners in Ontario with proficiency requirements and title reform. That legislation never materialized.

In September, Fedeli announced the government wouldn’t support the Canadian Securities Administrators’ proposals to ban deferred sales charges. The PC government would instead work with stakeholders and other provinces to develop alternatives, he said, though no details have been provided.

U.S. economic data

U.S. inflation data from October will be released on Wednesday. Headline inflation has been gradually declining after a drop in gas prices and significant decreases in the prices of clothing and used car prices, CIBC says in its week ahead report. But a rise in gas prices could bring inflation back up to 2.6%.

Core inflation could rise by 0.2% to keep the annual rate of inflation at 2.2%, National Bank says in its weekly economic review.

Also, expect to see a rise in retail sales of 0.6%, attributable to an increase in auto sales and higher gas prices, National Bank says.

CIBC forecasts retail sales will soften and “settle at a more sustainable pace” in the months ahead from a slowdown in sales of  “interest-rate sensitive segments of the economy” including housing and autos, after accounting for effects from weather.

Canadian manufacturing shipments

Factory export data for September will be released on Friday. National Bank expects that exports will contract by 0.5% after also declining in August. But a drop isn’t necessarily bad news as it could still “translate into a healthy 8.5% annualized increase in Q3 as a whole,” National Bank says.

Read the CIBC week ahead and the National Bank weekly economic review.

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.