September's producer inflation topped forecasts as energy prices continued to rise. The data continued to suggest that strong economic activity carried over from the summer, in line with our forecast of a 3.1% growth in gross domestic product for the third quarter. Looking ahead, though, as economic ... READ MORE >
Economics
Excess savings are critical to the economic expansion’s duration
The American economy has shown resilience in the face of rising interest rates as consumers, bolstered by excess savings built up during the pandemic, have continued to spend. But how long can these savings last? According to our analysis of revised data from the Bureau of Economic Analysis, ... READ MORE >
Canada has an acute shortage of housing. Easing regulations would help solve that.
Canada’s housing crisis keeps getting worse. The latest Housing Supply Report by the Canada Mortgage and Housing Corporation concluded that the level of new construction is too low to address the long-term housing supply gap. The housing supply grew by only 1% in the first half of this year, ... READ MORE >
Oil price increase to exert limited impact following attack on Israel
Oil prices surged following the surprise attack by Hamas on Israel and Israel’s counterstrike over the weekend. After a knee-jerk reaction upon the open of trading around the world, prices have been well behaved and should abate as the shock of the attack, as deadly as it is, abates. It is ... READ MORE >
The great rate reset: The end of easy money, rising yields and the onset of a new era
In the Federal Reserve’s September Summary of Economic Projections, policymakers indicated that the long-run neutral federal funds rate, or what economists refer to as r-star, has moved higher toward 3%. The implied logic of that forecast has prompted investors and market participants to reset ... READ MORE >
Canada’s job market remains resilient, adding 64,000 jobs
The Canadian economy remained resilient in September, adding 64,000 jobs as the unemployment rate was unchanged at 5.5%, according to data released Friday by Statistics Canada. There were two reasons that the unemployment rate stayed the same despite the job gains: population growth and a slowdown in ... READ MORE >
Blowout employment report is a win for the American real economy
The U.S. September employment report, with a surprising gain of 336,000 jobs, surely exaggerates the true underlying pace of hiring that remains quite strong but not at the robust levels implied by the monthly Bureau of Labor Statistics estimate released on Friday. Once one considers the upward ... READ MORE >
Initial jobless claims tick up in a still-tight labor market
Initial claims inched up last week as the impact of the United Auto Workers strike remained muted. New filings increased by 2,000 to 207,000 for the week ending Sept. 30, lower than the median forecasts of 210,000, according to Labor Department data released Thursday. That continued to suggest a ... READ MORE >
Chart of the Day: Falling oil and gas demand implies inflation relief
Easing demand for oil and gasoline should provide relief in top-line inflation in October and November. Falling wholesale gasoline prices imply a decline of 12% in retail gasoline prices in the coming weeks from its current level of $3.79 to roughly $3.34 per gallon. This is consistent with the ... READ MORE >
Service sector extends growth in September
The service sector posted another steady month of growth in September as business activities rose at the fastest rate in three months, the Institute for Supply Management reported on Wednesday. Except for last December, the sector has expanded in 39 of the past 40 months, a key support for the economic ... READ MORE >