US Economics Weekly Economy will avoid a deep freeze The unusually cold winter weather may take some of the heat out of the economic recovery, but the adverse impact will be small for two reasons. First, the hit to activity will be cushioned by... 13th January 2014 · 1 min read
Canada Economics Weekly Housing affordability threatened by rising mortgage rates We expect mortgage rates to rise further this year, posing a threat to housing affordability for prospective home buyers. With average house prices already far too high relative to household incomes... 13th January 2014 · 1 min read
US Housing Market Chart Pack Sharp rise in housing starts The strong 22.7% m/m increase in housing starts in November was an encouraging sign that the rise in mortgage interest rates is not a permanent setback for the homebuilding recovery. This gain echoed... 10th January 2014 · 1 min read
Canada Data Response Labour Force Survey (Dec.) December's shocking decline in employment and hours worked probably had more to do with severe winter storms rather than the broader state of the economy. Accordingly, we suspect that this large... 10th January 2014 · 1 min read
US Data Response Employment Report (Dec.) We suspect that the unexpectedly weak 74,000 gain in non-farm payrolls in December is largely explained by the unseasonably severe winter weather last month. Under those circumstances, we still expect... 10th January 2014 · 1 min read
Canada Chart Pack Low inflation may soon prompt easing bias Inflation has remained at the bottom of the Bank of Canada's 1% to 3% target range for over a year now, highlighting why the Governor is in no hurry to raise interest rates anytime soon. (See Chart.)... 9th January 2014 · 1 min read
US Housing Market Data Response Mortgage Applications (Dec.13) The drop in mortgage applications in December reflects the increase in mortgage interest rates over the past two months. But if the wider economy continues to pick up speed during 2014 as we expect... 8th January 2014 · 1 min read
Canada Data Response International Merchandise Trade (Nov.) November's flat export and import trade figures suggest that the economy lost some momentum mid-way through the fourth quarter of last year. Given the fairly strong start to that quarter, however, we... 7th January 2014 · 1 min read
US Data Response International Trade (Nov.) The trade deficit unexpectedly shrank to a four-year low of $34.3bn in November, from $39.3bn, suggesting that fourth-quarter GDP growth could turn out to be above 3.0% annualised. 7th January 2014 · 1 min read
US Housing Market Data Response CoreLogic House Prices (Nov.13) It’s too early to tell if the marginal dip in the annual pace of house price inflation in November marks the start of the slowdown in price gains that we are expecting. But we are confident that... 7th January 2014 · 1 min read
US Employment Report Preview Labour market conditions still improving gradually Our econometric model points to a healthy 200,000 gain in non-farm payrolls in December, although we suspect that the unemployment rate was probably unchanged at 7.0%. 6th January 2014 · 1 min read
Global Markets Update Is the CAPE signalling a bubble in US equities? The fact that the valuation of the US stock market is already high compared to its long-run averages on the cyclically-adjusted price/earnings (CAPE) measure is a good reason to be wary of forecasting... 6th January 2014 · 1 min read
US Economics Weekly New Year optimism is justified this time 2014 could be the year that the economic recovery finally kicks into a higher gear. The big difference is that the headwinds that have hampered growth in recent years are fading, while the tailwinds... 6th January 2014 · 1 min read
Canada Economics Weekly Consensus overly optimistic on 2014 growth prospects The consensus view that economic growth will accelerate this year is misplaced. While exports and business investment should improve modestly, we anticipate this will be more than offset by weaker... 6th January 2014 · 1 min read
US Data Response ISM Manufacturing Index (Dec.) The tiny fall in the ISM manufacturing index in December did little to dampen the usual New Year optimism as the survey remains consistent with annualised GDP growth of a healthy 3%. 2nd January 2014 · 1 min read
US Data Response Durable Goods (Nov.) The better-than-consensus 3.5% m/m jump in durable goods orders in November, although partly due to a bounce back in the volatile aircraft category, suggests that fourth-quarter business investment in... 24th December 2013 · 1 min read
