Despite a slight increase in Canada's inflation rate last month, the Bank of Canada remains determined to bring it down to 2%, with the possibility of another rate hike being considered in September. However, some economists believe that the positive overall figures may allow the Bank to pause on rate increases without a significant negative impact.
The U.S. Bureau of Labor Statistics has revised down its tally of total employment in March 2023 by 306,000, indicating that there were about 300,000 fewer job gains during April 2022 to March 2023 than initially estimated, which could impact the Federal Reserve's decision on interest rates.
The Bank of Canada may shift its focus from the output gap to labor market indicators, such as unemployment and wages, in order to make inflation forecasts and guide its interest rate decisions, according to a report by CIBC economists. The report suggests that the labor market has become a more reliable indicator of excess demand or supply, and forecasts that if the job market outlook suggests it's not necessary, there may be no more rate hikes this year and rate cuts in early 2024.
Canada's second-quarter GDP report is expected to show a significant slowdown in economic growth, potentially leading to a pause in interest rate hikes by the Bank of Canada despite recent high inflation data.
Canada's upcoming gross domestic product (GDP) reading is expected to be closely watched by the Bank of Canada (BoC) ahead of its September interest rate decision, with economists predicting a slowdown in the second quarter that could lead to a pause in interest rate hikes despite higher-than-expected inflation. The impact of recent wildfires and a dock workers strike is also expected to affect the data.
Job creation in the US slowed in August, indicating that the strong economy could be starting to weaken under pressure from higher interest rates. Private employers added 177,000 jobs, well below the previous month's total of 371,000. Pay growth also slowed, suggesting more sustainable growth as the effects of the pandemic recede. Investors and economists remain uncertain about the future of US inflation and whether the economy can continue to grow without a significant slowdown.
The Bank of Canada is expected to keep its key interest rate steady at 5.00% and maintain that level until at least the end of March 2024, despite rising inflation and a revival in the housing market, according to economists in a Reuters poll.
U.S. job growth likely slowed in August due to factors such as striking actors and a major trucking company bankruptcy, but the unemployment rate is expected to remain low; economists caution against overreacting and advise focusing on long-term trends.
The August jobs report is expected to show steady job growth and a stable unemployment rate, suggesting that the current "Goldilocks" labor market could be sustained for a long time, but concerns remain about cooling economic growth, rising debt, and the risk of reaccelerating inflation.
The US added 187,000 jobs in August, but the unemployment rate rose to 3.8 percent, indicating a plateau in the labor market as the Federal Reserve considers another interest rate hike.
The August jobs report indicates a cooling job market with a slight increase in unemployment driven by rising labor force participation, suggesting the Federal Reserve should hold off on further interest rate increases.
Canada's economy unexpectedly contracted in the second quarter, raising concerns of a possible recession, as declines in housing investment and slower exports and household spending impacted growth. This is likely to lead the central bank to hold interest rates steady.
The August jobs report showed solid hiring, with employers adding 187,000 payroll positions, but the unemployment rate unexpectedly jumped and wage growth eased, leading to speculation that the Federal Reserve may have hiked interest rates for the last time.
The Canadian economy contracted in the second quarter, leading economists to believe that the Bank of Canada's rate hiking campaign may be coming to an end.
The Canadian government is facing higher debt servicing costs as interest rates rise, resulting in billions of additional dollars spent on interest payments and less money available for other government priorities, potentially leading to difficult decisions about cutting spending or increasing taxes.
Despite weakening economic growth, the unemployment rate remains low, which is puzzling economists and could lead to a "full-employment stagnation" scenario with a potential recession and low unemployment rates, posing challenges for the Federal Reserve and the overall economy.
The Canadian dollar strengthened against the US dollar as stronger-than-expected jobs data raised the possibility of another interest rate hike by the Bank of Canada.
Bank of Canada Governor Tiff Macklem suggests that interest rates may not be high enough to bring inflation back down to target, indicating a hawkish approach after keeping borrowing costs at a 22-year high; Macklem highlights the need for more restrictive monetary policy to restore price stability and reduce inflation.
Economists predict that Canada's inflation rate is likely to increase to around four percent in August, mainly due to higher gasoline prices, reversing the previous progress made.
Canada's inflation rate rose to 4.0% in August, driven by higher gasoline prices, while the Trans Mountain oil pipeline expansion is expected to disrupt oil flow to the US, potentially increasing prices, according to Statistics Canada. US Treasury Secretary Janet Yellen believes the US economy can withstand near-term risks such as strikes, government shutdowns, student loan payments, and spillovers from China's economic woes, stating evidence of a healthy labor market and consumer spending. Rent is rising faster in Brampton than in any other Canadian city, leading to financial difficulties for renters.
The Canadian economy has entered a long-delayed recession due to highly indebted households, overvalued home prices, and a slowdown in consumer spending, with the recession expected to last until the first quarter of 2024 and result in a 1.5% decline in GDP and an increase in the unemployment rate to 7.2%.
High inflation is leading to increased labor action in Canada as workers demand higher wages to combat the eroded purchasing power caused by rising costs of living, according to a report by RBC Economics. The report suggests that taming inflation is crucial to restoring peace in labor relations in the country.
Alberta Premier Danielle Smith plans to leave the Canada Pension Plan and set up an alternative provincial pension system, citing potential cost savings and more stable benefits, despite the Canada Pension Plan Investment Board doubting the credibility of the province's math; Canada's worsening diplomatic feud with India over allegations of Indian agents being involved in the killing of a Canadian citizen has led to the cancellation of a planned trade mission and the suspension of trade agreement talks; Union wage settlements in Canada are spiking following years of lagging behind inflation, potentially complicating the Bank of Canada's inflation efforts and leading to more labor disputes; Canada's inflation rate rose to 4% in August, driven by rising gasoline and rent prices, increasing the likelihood of another interest rate increase; Ford Motor Co. of Canada and the Unifor union have reached a deal to avert a strike by auto workers, subject to ratification; The best place to retire in Canada income-wise varies geographically, with generally better numbers from east to west and south to north.
Canada's gross domestic product (GDP) remained essentially unchanged in July, with zero percent growth, due to a decline in the manufacturing sector, weaker performance than expected, and shrinking industries such as agriculture, transportation, and retail. On the positive side, the mining and oil and gas sector experienced growth. Economists predict little to no growth in the third quarter, leading to expectations that the Bank of Canada will not make any changes to monetary policy for the rest of the year.
Canada's economy stalled in July and showed slight growth in August due to a decline in the manufacturing sector, leading to reduced expectations of an interest rate hike next month.
Summary: Bank of Canada deputy governor Nicolas Vincent states that businesses in Canada are increasing their prices more often and by larger amounts, contributing to higher-than-expected inflation.
US job growth exceeds expectations, with 336,000 jobs added in September, increasing the likelihood of further rate hikes by the Federal Reserve, while in Canada, job gains of 63,800 in September and soaring wages also raise the chances of another rate hike.
The US economy added 336,000 jobs in September, exceeding expectations, but investors are concerned about the prospect of higher interest rates, causing stocks to slump and bond yields to surge.
U.S. employers added 336,000 jobs in September, potentially strengthening the case for another interest rate increase by the Federal Reserve, despite wage growth remaining muted and upcoming inflation data expected to show continued slowing.
The September jobs report showed the addition of 336,000 jobs and no change in the unemployment rate at 3.8%, exceeding expectations and indicating a strong job market amidst economic headwinds.