Americas September 2005

• The number of Canadians collecting unemployment rose 1.7 percent in June compared to May, according to Statistics Canada. The number was 3.7 percent lower than the June 2004 reading, however. Most jobs lost were in Quebec.
  
  
• Higher energy prices helped raise Canada’s inflation rate for July to 2.0 percent, slightly below expectations and up from 1.7 percent the previous month. The core inflation rate fell to 1.4 percent, unchanged from June and below expectations of 1.5 percent. According to Statistics Canada, employee-discount pricing on virtually all automobiles helped keep inflation down.
  
  
• Inflation in Brazil continued to decline, as the country’s central bank’s weekly survey of more than 100 economists forecast a drop in the inflation index for the 13th straight week. The respondents predicted the IPCA Broad Consumer Price Index would come in at 5.4 percent, 0.3 percent higher than the central bank’s 2005 target of 5.1 percent. Economists also predicted a 2006 rate of 4.98 percent, the first time in 15 months the number has been below 5 percent.
  
  
• Despite a strong currency, Canada’s trade surplus for June rose sharply to $4.9 billion Canadian (about $4.1 billion U.S.). In large part because of record exports to countries outside of the U.S., the surplus topped May’s total of $4.4 billion Canadian. Because of the high total, economists expect the Bank of Canada to raise interest rates at their Sept. 7 meeting.
  
  
• Continuing a trend that began in March, Mexico’s central bank held the country’s interest rate steady at 9.75 percent. The rate rose 12 times in just more than a year, but has remained steady since March. However, inflation seems under control in the country, and fears of declining economic growth could cause the central bank to lower rates soon, according to economists.
  
  
• Mexico’s account deficit for the second quarter shrank to $19 million, the country’s lowest total in more than five years. The continuing surge in oil prices, plus remittances from Mexican residents living outside the country, helped shrink the deficit from $200 million in the second quarter of 2004.