The Bank of Canada lowered its interest rate to 3.25 per cent — an overdue move out of restrictive territory given that inflation has largely been tamed. Expect more rate cuts in early 2025 to get the economy onto an expansionary trajectory. The policy rate should come down to 2.75 per cent within the ... READ MORE >
Economics
Inflation ticks up amid seasonal factors and strong growth
The disinflation trend continued to stall in November, according to the most recent consumer price index data released on Wednesday. November marked the first month since April when overall CPI inflation grew by 0.3% monthly, or 3.7% annualized, well above the Federal Reserve's 2% target and a cause ... READ MORE >
Morning market minute: Firms to pull forward durable goods orders to avoid tariffs
Inside the University of Michigan’s survey on consumer sentiment for November, buying conditions for durable goods increased by more than 20%. Firms appear to be acting rationally to avoid rising import taxes in the new year. These purchases will bolster gross domestic product in the fourth quarter, ... READ MORE >
Canada’s job market cools as unemployment rises to 6.8%
Canada added 51,000 jobs in November, double the expected number, but the overall picture does not look rosy. The unemployment rate increased by 0.3 percentage points to 6.8 per cent — the highest since January 2017 — as more people looked for work. A slow job market finally hit wages, as wage growth ... READ MORE >
Hiring rebounded in November following weather-distorted October report
The American labor market bounced back in November with the creation of 227,000 jobs, a rebound from the hurricane-related distortions of October and further evidence that the labor market remains remarkably stable. Once one corrects for the noise in the data, the pace of hiring looks to be near ... READ MORE >
Morning market minute: Will wage growth moderate?
A look at U.S. wage growth ahead of the November U.S. jobs report to be released today should translate to a gain of 3.9% on a year-ago basis. We expect a net change in total employment of 220,000 positions, a 4.1% unemployment rate and a 0.3% increase in average hourly earnings. Solid job growth in ... READ MORE >
Initial jobless claims climb amid holiday volatility
First-time claims for unemployment benefits increased by 9,000 to 224,000 last week, in line with the 13-week moving average of 226,000 and a sign of a labor market where workers have a remarkable level of job security. With arrival of the holiday season, though, top-line claims will show volatility in ... READ MORE >
Morning market minute: The mystery of rising long-term unemployment
The American labor market by any definition remains strong and, in our estimation, stands at full employment. The numbers tell a story of resilience The unemployment rate has ranged between 3.4% and 4.3% over the past two years. The median duration of unemployment stands at 10 weeks, with initial ... READ MORE >
ISM service sector survey: Solid expansion continues
The U.S. service sector in November showed an expansion for the 51st month in the 54 months since the recovery from the pandemic began, according to the Institute for Supply Management’s services purchasing managers index released on Wednesday. With the labor market at full employment and wages growing ... READ MORE >
Morning market minute: Return of the term premium on Treasury notes
The yield on the 10-year Treasury is trading near 4.20%, which was the RSM year-end target, and has averaged 4.18% for the year through Dec. 3. And the yields are set to go higher. An economy with growth that could approach 3% with full employment, coupled with expectations of expansionary fiscal ... READ MORE >