According to Statistics Canada retail sales increased 1.1% to $65.9 billion in April. Sales increased in eight of nine subsectors and were led by increases at general merchandise retailers (+3.3%) and food and beverage retailers (+1.5%).
Core retail sales—which exclude gasoline stations and fuel vendors and motor vehicle and parts dealers—increased 1.5% in April.
In volume terms, retail sales increased 0.3% in April.
Per the US Department of Labor in the week ending June 17, the advance figure for seasonally adjusted initial claims was 264,000, unchanged from the previous week’s revised level. The previous week’s level was revised up by 2,000 from 262,000 to 264,000. The 4-week moving average was 255,750, an increase of 8,500 from the previous week’s revised average. This is the highest level for this average since November 13, 2021 when it was 260,000. The previous week’s average was revised up by 500 from 246,750 to 247,250.
The advance seasonally adjusted insured unemployment rate was 1.2 percent for the week ending June 10, unchanged from the previous week’s unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending June 10 was 1,759,000, a decrease of 13,000 from the previous week’s revised level. The previous week’s level was revised down by 3,000 from 1,775,000 to 1,772,000. The 4-week moving average was 1,770,000, a decrease of 7,500 from the previous week’s revised average. The previous week’s average was revised down by 750 from 1,778,250 to 1,777,500.
The Bank of England’s Monetary Policy Committee (MPC) sets monetary policy to meet the 2% inflation target, and in a way that helps to sustain growth and employment. At its meeting ending on 21 June 2023, the MPC voted by a majority of 7–2 to increase Bank Rate by 0.5 percentage points, to 5%. Two members preferred to maintain Bank Rate at 4.5%.
At the time of the previous MPC meeting and May Monetary Policy Report, the market-implied path for Bank Rate averaged just over 4% over the next three years. Since then, gilt yields have risen materially, particularly at shorter maturities, now suggesting a path for Bank Rate that averages around 5½%. Mortgage rates have also risen notably. The sterling effective exchange rate has appreciated further.
The Swiss National Bank is tightening its monetary policy further and is raising the SNB policy rate by 0.25 percentage points to 1.75%. In doing so, it is countering inflationary pressure, which has increased again over the medium term. It cannot be ruled out that additional rises in the SNB policy rate will be necessary to ensure price stability over the medium term. To provide appropriate monetary conditions, the SNB also remains willing to be active in the foreign exchange market as necessary. In the current environment, the focus is on selling foreign currency.
The SNB policy rate change applies from tomorrow, 23 June 2023. Banks’ sight deposits held at the SNB will be remunerated at the SNB policy rate of 1.75% up to a certain threshold. Sight deposits above this threshold will be remunerated at an interest rate of 1.25%, and thus still at a discount of 0.5 percentage points relative to the SNB policy rate. Inflation has declined significantly in recent months, and stood at 2.2% in May. This decrease was above all attributable to lower inflation on imported goods, in particular lower prices for oil products and natural gas.
