The Federal Open Market Committee kept its federal funds policy rate between a range of 5.25% and 5.5% at its meeting Wednesday while signaling that it is moving toward easing its restrictive policy rate. We expect that the FOMC will reduce the policy rate by 25 basis points at its September ... READ MORE >
Economics
Job openings exceed forecasts as layoffs and quits reach multiyear lows
Job openings continued to point to strong labor demand, staying above forecast at 8.18 million in June. May’s number was also revised up to 8.23 million, according to Bureau of Labor Statistics data released on Tuesday. The data supported our forecast of another strong month of job gains in July when ... READ MORE >
U.S. July employment report to show a gain of 200,000 jobs
Our provisional forecast for the July jobs report when it is released on Friday implies a net increase in total employment of 200,000 jobs with an easing in the unemployment rate from 4.1% to 4%. In addition, we forecast a 0.3% increase in average hourly earnings, which should translate to a 3.7% ... READ MORE >
PCE inflation continues to ease in June as income and spending gain
The Federal Reserve’s preferred measure of inflation continued to ease in June, reaffirming that the central bank has achieved enough price stability to reduce its policy rate at its September meeting, which has been our baseline forecast for a number of months. Top-line inflation in the personal ... READ MORE >
American economy grew by 2.8% in second quarter, exceeding forecasts
The U.S. economy advanced at a 2.8% pace in the second quarter, exceeding RSM’s forecast of 2.4%, and was up by 3.1% on a year-ago basis. For the first half of the year, average growth was 2.1%, which should put to rest any arguments that the economy is about to fall off a cliff. Perhaps more ... READ MORE >
Bank of Canada reduces rate to 4.5 per cent amid disinflation
There was little surprise in the Bank of Canada’s announcement on Wednesday when the central bank reduced its policy rate by 25 basis points to 4.5 per cent. The tone of the central bank's statement was notably dovish and marked a departure from a hawkish or cautionary tone that persisted over the past ... READ MORE >
GDP preview: U.S. top-line growth to show solid increase
We expect a 2.4% pace of growth with modest downside risk to our forecast when gross domestic product for the second quarter is released on Thursday. The two main swing factors are inventories, which should be quite strong and are likely to make overall top-line economic activity appear stronger than ... READ MORE >
Digital transformation and Canada’s public sector
With Canada’s economy mired in a slowdown, its stagnating productivity has increasingly become a drag on growth. Nowhere is this more evident than in the public sector, which makes up a significant portion of the economy yet remains plagued by archaic systems that hamper service delivery and hold back ... READ MORE >
Canada’s CPI in June shows disinflation and suggests rate cut
June’s inflation report in Canada confirms that the economy is on a disinflationary trajectory as headline inflation dropped to 2.7% because of slower growth in gasoline prices. On a monthly basis, the consumer price index fell by 0.1% after a 0.6% increase in May. On a seasonally adjusted monthly ... READ MORE >
Retail sales were unchanged in June but still exceed forecasts
The upside surprises in retail sales that were announced on Tuesday proved that the significant slowdown in inflation in the past two months has been a major tailwind for consumer spending, not the other way around as many had anticipated. After adjusting for inflation, sales volume for June, which has ... READ MORE >