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Any bounce in Canada’s economy is likely to come from gains in wood products and food manufacturing.DARRYL DYCK/The Globe and Mail

There isn't much in the way of Canadian economic indicators this week, but the U.S. Federal Reserve would hog the limelight regardless with its Wednesday policy announcement.

On Tuesday, markets will get a sense of how Canada's factories fared in July, as Statistics Canada is expected by economists to report a rebound in manufacturing shipments.

Observers generally expect the report to show a pick-up in sales of about 0.5 per cent, following June's slump, also of 0.5 per cent.

"The forecasted gain is predicated on a rebound in some sectors that experienced outsized declines in the prior months, including wood product and food manufacturing, and is corroborated by strong exports observed in the international merchandise trade report," said economists at Toronto-Dominion Bank.

"In contrast, transport equipment is expected to be a soft spot in this report as a sharp decline in aircraft exports and U.S. orders suggest a pullback in aerospace sales while weak auto production suggest auto shipments slipped in July."

CIBC World Markets expects a flat reading, and noted that shipments are now down about 4 per cent from last year "as the sector continues to struggle from weaker external demand and the legacy impacts of an appreciating currency."

Friday brings Statscan's August report on inflation.

Observers expect to see that consumer prices were little changed in August compared to July, and up 1.1 per cent compared to a year earlier, a dip from July's annual pace of 1.3 per cent.

"One sector experiencing disinflation is food, with July's 0.8-per-cent year-over-year reading a three-year low, and no signs of a pickup," said senior economist Benjamin Reitzes of BMO Nesbitt Burns.

"Auto prices likely softened somewhat in August as well, as dealers ramped up discounting, driving the best sales on record for that month. Gasoline prices are also expected to contribute to the modest headline, pulling back slightly after rising 5.4 per cent over the prior three months."

Core inflation, which excludes volatile items and helps guide the Bank of Canada, is projected to have dipped to about 1.3 per cent, "reinforcing that despite stimulative low rates, growth is still too tepid to stoke underlying inflation pressures," said Emanuella Enenajor of CIBC World Markets.