June 21, 2018

On Thursday, the S&P 500 was down 0.6% and Toronto was down 0.5%.

AutoCanada was down 3.8% losing some of the little bounce it had had on news that it will look at strategic alternatives.

Linamar was down another 2.9% on trade war worries.

I was surprised by the news today that Employment Insurance recipients have fallen to a record low based on data going back to 1997. For some people, the reason is that the benefits have run out. But overall it is because unemployment has been falling.

The economy has been doing well. In my experience, many or most people almost always view the economy as bad, the times as tough. I suppose life is never all that easy but it appears that today’s economy is actually better than the historical average in someways.

Statistics Canada also reported that Following a strong March, sales in the food services and drinking places subsector were down 1.8% in April to $5.8 billion…Colder than normal spring temperatures and an ice storm affecting Central and Eastern Canada may have contributed to decreased sales”

This sounds bad for the likes of Boston Pizza, but note that this was a decline versus the prior month. The report goes on to note that sales were actually up fairly strongly versus April of 2017 – so that’s good news for the likes of BP for which year over year same store sales increases is very much THE key factor.

The report states:

The figures in this section are based on unadjusted (that is, not seasonally adjusted) estimates.

Unadjusted year-over-year sales in the food services and drinking places subsector rose 3.1% in April compared with April 2017. Sales were up in each of the following industry groups: full-service restaurants (+2.8%), limited-service restaurants (+2.7%), special food services (+8.1%) and drinking places (+1.1%). Sales increased in seven provinces, with Ontario (+4.9%), British Columbia (+4.2%) and Quebec (+1.9%) posting the largest gains in dollar terms. Newfoundland and Labrador (-3.2%) reported the largest decline.

Prices for food purchased from restaurants were up 4.5% in April compared with April 2017, while prices for alcoholic beverages served in licensed establishments were up 2.2%.

The increase in sales appears to be essentially due to price increases as opposed to volume.

I find it strange that they talk about the comparison to the same month the prior year not being seasonally adjusted. Since it is the same month I would think there would be no seasonal adjustment to make. Unless they were thinking of the timing of Easter or the number of Saturdays in the month.


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