### Summary
The chief global economist at Piper Sandler has warned that the U.S. economy is set to worsen before improving, and Americans should save money and maintain their savings. Rising everyday prices, declining manufacturing activity, excessive government spending, and a tight labor market are all contributing factors.
### Facts
- Americans are spending $709 more on everyday goods in July compared to two years ago.
- One-third of U.S. households spent more than 30% of their income on housing in 2021.
- Excessive government spending is blamed for high prices.
- The declining birth rate and closure of maternity wards indicate that Americans are postponing having children.
- Inflation is a major challenge for the economy, and a recession will put pressure on all wealth groups.
- The economist argues that the fiscal stimulus from the Inflation Reduction Act has had a "counterproductive" impact on controlling inflation.
- To see an economic turnaround by 2025, the private sector needs to drive capital spending, while curbing government spending and reforming entitlements is necessary.
- The economist hopes for sustained low inflation and increased labor force participation but emphasizes the need for tough decisions in Washington.
- The economist believes that the U.S. needs to get its fiscal house in order to become a leader in the global economy.
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 is facing a deep crisis due to a housing crisis, rising consumer debt, and high interest rates, which are causing unaffordability and financial vulnerability for working people, while the government's plan to address these challenges remains unclear.
Canada's economy is struggling and heading towards a recession, with declining incomes and high household debt, leading to growing dissatisfaction with Prime Minister Trudeau and his government.
The Canadian government is taking measures to address affordability challenges, including a cut in Goods and Services Tax, plans to boost the Competition Bureau's power, and an effort to lower food prices; however, economists believe these measures are unlikely to have an immediate impact on inflation or interest rates.
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%.
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.
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