Canadian Economic Update
The week of November 17th, 2025, is expected to bring significant economic updates, particularly in Canada. After a record-long government shutdown in the United States, delayed data releases are anticipated to start trickling out. This includes the September nonfarm payroll data, which was initially scheduled for release in early October.
Economic Indicators in Focus
Next week’s Canadian economic calendar features key releases on household spending and inflation. The primary focus will be on October’s Consumer Price Index (CPI) data, along with housing starts and resales, set to be released on Monday. Additionally, September retail sales and the advance estimate for October will be announced on Friday.
Inflation Expectations
Headline inflation is forecasted to edge down to a 2.1% year-over-year rate, primarily driven by lower gasoline prices, which fell 5% from September. Food price growth is expected to remain close to September’s 3.8% annual rate. The October data will include the annual update on property tax prices in the CPI, with significant increases in some major population centers, but a smaller national increase of 4%, compared to 6% in October last year.
Core Inflation Measures
Broader measures of ‘core’ inflation are expected to remain above the Bank of Canada’s 2% target rate in October. The price growth excluding food and energy products is predicted to hold at a 2.4% year-over-year rate. CPI-trim and CPI-median measures are expected to remain around a 3% year-over-year rate.
Retail Sales and Consumer Spending
Statistics Canada’s advance estimate indicates a 0.7% month-over-month decline in retail sales for September, reversing most of the 1% increase in August. On a quarterly annualized basis, retail sales volume growth is likely to have maintained positive momentum in Q3, albeit at a slower pace than Q2. This aligns with the cardholder spending analysis for Q3, which suggests consumer resilience despite ongoing moderation in spending patterns.
Week Ahead Data Watch
- Housing Starts: Anticipated to retreat in October following September’s surge, with a forecast of 265,000 units, representing a 5% monthly decline.
- Home Resales: The October report is expected to show a mixed housing market backdrop across the country, with elevated inventories and sales in less affordable markets in B.C. and Ontario, but resale increases in other regions.
Conclusion
In conclusion, the upcoming week is crucial for understanding the state of the Canadian economy, particularly in terms of consumer prices, spending, and housing market trends. As the data unfolds, it will provide valuable insights into the country’s economic health and potential future directions. The combination of inflation rates, retail sales, and housing market activity will be key indicators to watch, offering a comprehensive view of Canada’s economic performance.
