A robust 0.4% increase in personal spending and a 0.6% increase in personal income in October underscore just how strong the economy and households have been ahead of the critical holiday spending season. But at the same time, the strong spending and income data, released on Wednesday by the Commerce ... READ MORE >
Inflation
Canada’s prices for services and shelter decelerated in October
Canada’s consumer price index accelerated in October, but that increase will not deter a rate cut by the Bank of Canada in December, though the size of the cut is up for debate. Canada’s CPI accelerated to 2.0 per cent, up from 1.6 per cent in September, because of a smaller decline in gasoline prices ... READ MORE >
The U.S. economic year ahead: Regime change, growth and rising interest rates
Since the American economy emerged from the shocks of the pandemic, we have made the case that it is undergoing a fundamental structural change. The end of historically low interest rates, the adoption of policies aimed at bolstering vital national industries and the influx of foreign capital have all ... READ MORE >
Falling jobless claims and firmer inflation point to slower rate cuts
The impact of two major hurricanes and labor strikes in the past two months on initial jobless claim data has completely faded, as the metric fell to 217,000 last week, lower than the pre-pandemic average. The continued drop in new filings for unemployment benefits, a proxy for layoffs, should suggest ... READ MORE >
Hurricanes and sticky service and housing prices propped up inflation in October
The disinflationary trend that has worked its way through the economy for much of the year modestly abated in October as the top-line consumer price index increased by 0.2% and the core rose by 0.3% on a monthly basis. On an annual basis, those figures increased by 2.6% and 3.3%, ... READ MORE >
Consumer sentiment in November rises to highest level since April
U.S. consumer sentiment rose to the highest level since April as gasoline prices continued to fall and inflation concerns eased. According to the University of Michigan's survey in November, the sentiment index increased to 73 from 70.5 with expectations leading the increase. The election should not ... READ MORE >
Strong gains in Income and spending boost economic growth in September
Robust spending, increasing income and the re-establishment of price stability amid strong productivity gains are the primary factors shaping the economic narrative. American households are well positioned to keep spending at a 3% to 3.5% pace as inflation moves back to 2% and real wages continue ... READ MORE >
Bank of Canada cuts rates by half point amid slow growth
The Bank of Canada reduced its policy rate by 50 basis points to 3.75 per cent on Wednesday as growth replaces inflation as the central bank's primary economic concern. After five consecutive quarters of declining per-capita gross domestic product growth, Canada’s sluggish economy suggests that the ... READ MORE >
American outperformance in the global economy
One of the more underdiscussed economic developments following the shocks of the pandemic has been the outperformance of the United States economy compared with its G-7 peers. Over the past eight quarters, the American economy has grown at a 2.9% annualized pace and is on track to grow at or above ... READ MORE >
Producer price index implies further disinflation
The lower-than-expected producer inflation report released on Friday should offset some of the upside surprises from the consumer inflation data released on Thursday. According to the Bureau of Labor Statistics, final demand inflation was unchanged in September, while the core reading grew more slowly ... READ MORE >