Canada Economics Update Core inflation to decline in 2020 Wage growth looks set to rise modestly, but the effect on unit labour costs is likely to be offset by a rebound in productivity growth. This suggests that core inflation will remain close to 2.0% in... 17th June 2019 · 1 min read
Canada Economics Update Wage growth not as strong as LFS suggests Annual wage growth according to the Labour Force Survey looks set to rise towards almost 4% in the coming months, but experience suggests that it is probably exaggerating the true strength of wages... 13th June 2019 · 1 min read
Canada Economics Update Growth to drop back after second quarter rebound Although the Bank of Canada’s expectations for first-quarter GDP growth were more accurate than our own, we still think the Bank is underestimating the strength of the rebound in growth this quarter... 5th June 2019 · 1 min read
Canada Economics Update Bank to cut interest rates this year The Bank of Canada today argued that the recent economic slowdown has been largely due to temporary factors, but that growing global trade tensions mean that “the degree of accommodation being... 29th May 2019 · 1 min read
Canada Economics Update Labour market’s strong performance will soon end Trade uncertainty and increased competition in the food delivery service sector help to explain the unusual strength of employment growth. Surveys now suggest that jobs growth will slow and, even with... 16th May 2019 · 1 min read
Canada Economics Update Growth to rebound in Q2, before dropping back An unwinding of the temporary factors that weighed on activity in January and February means that GDP growth will rebound from 1% annualised in the first quarter to about 2.2% in the second. That... 2nd May 2019 · 1 min read
Canada Economics Update Bank gives up on future rate hikes By dropping any reference to future rate hikes today, the Bank delivered its most dovish policy signal in two years. While the Bank remains optimistic about economic prospects in the second half of... 24th April 2019 · 1 min read
Canada Economics Update Business Outlook Survey (Q1) The latest Business Outlook Survey suggests that GDP growth will remain weak while core inflation could fall sharply. This supports our view that the Bank of Canada’s next move will be to cut interest... 15th April 2019 · 1 min read
Canada Economics Update Full effects of housing downturn yet to be felt The continued weakness of home sales suggests that March’s rebound in housing starts is unlikely to be sustained, while the subdued pace of house price inflation points to spending growth remaining... 11th April 2019 · 1 min read
Canada Economics Update Households vulnerable despite robust labour market Despite the strength of the labour market, the precarious condition of households’ finances suggests that consumer spending growth will continue to disappoint. 11th April 2019 · 1 min read
Canada Economics Update Policy not as loose as Poloz thinks The Bank of Canada’s belief that the policy rate is still far below its neutral level looks doubtful. In fact, market pricing implies monetary policy is as restrictive as it was on the eve of the... 2nd April 2019 · 1 min read
Canada Economics Update Equity loans won’t prevent construction downturn It will be at least 18 months before any meaningful boost to construction from the equity loan scheme is felt. In the meantime, the softness of new home sales means that new construction is set to... 20th March 2019 · 1 min read
Canada Economics Update Budget 2019 won’t drive pick-up in growth The modest increase in spending detailed in Canada’s 2019 federal budget does little to alter the economic outlook. The onus therefore remains on the Bank of Canada to support the economy. 20th March 2019 · 1 min read
Canada Economics Update Drop in wealth to weigh on spending growth Consumers’ housing wealth declined last year for the first time in over three decades. The modest fall is unlikely to cause a drop in consumption, but it does suggest that spending growth will remain... 18th March 2019 · 1 min read
Canada Economics Update Labour market slack growing beneath the surface Recent declines in hours worked suggest that, despite decent gains in employment, slack is building in the labour market. That, in turn, is likely to limit any acceleration in wage growth. 13th March 2019 · 1 min read
Canada Economics Update Bank of Canada drops pledge to hike further The Bank of Canada has finally pulled its head out of the sand and acknowledged that the deteriorating economy no longer justifies higher interest rates in the near term. Although the Bank still... 6th March 2019 · 1 min read