Economies respond to financial conditions, which are determined by market expectations for monetary policy. With inflation still elevated and demand surging in Canada, we expect the Bank of Canada to continue raising interest rates to cool an overheating economy. While the Canadian economy may ... READ MORE >
Bank of Canada
Canada inflation eases, but the fight is not over
Inflation in Canada inched down in November, implying more room for the Bank of Canada to raise interest rates despite a slowing economy. November's headline Consumer Price Index dropped to a 6.8% increase from 6.9% on a year-ago basis, remaining significantly above the 2% target rate, ... READ MORE >
Financial conditions and Canada’s real economy
Tightening financial conditions are hurting the Canadian economy to the point where the rising risk of a recession and a housing contraction much larger than anticipated cannot be discounted. Although we expect the Bank of Canada to raise its policy rate to a peak of 4.75% early next year, after ... READ MORE >
Canada job gains slow in November
The Canadian economy added 10,100 jobs in November, easing some of the concerns over an overheating labor market after a blockbuster October jobs report. The data might prove that October's robust job gains was an aberration. Still, the implications regarding the central bank's fight against inflation ... READ MORE >
Canada adds a stunning 108,000 jobs in October, reversing decline of prior 5 months
In a stunning turnaround, Canada added 108,000 jobs in October, reversing all the losses from May to September. The outsize gain and the resilience of the job market suggest that the Bank of Canada will announce another supersize interest rate hike next month. Wages increased by a robust 5.6% and ... READ MORE >
Bank of Canada announces smaller-than-expected 50-basis-point hike
The Bank of Canada on Wednesday dialed back the pace of rate hikes, announcing a 50-basis-point hike and bringing the policy rate to 3.75%. This marks a 3.5% increase in just eight months, since the first rate hike in March. This smaller-than-expected rate hike comes as recession fears increase, and ... READ MORE >
Canada’s inflation refuses to cool
September’s consumer price index for Canada put out any hope that inflation will get back under control anytime soon and only added pressure on the Bank of Canada to maintain its aggressive interest rate hikes. Canada’s CPI rose by 6.9% on a year-over-year basis, slightly down from 7% in August, ... READ MORE >
Canada’s job market shows little sign of slowing
Canada’s economy in September reversed the slowing labour market of the summer, adding 21,100 jobs while unemployment fell to 5.2%, according to government data released Friday. Employment among women in their prime working age grew for the first time since May as children headed back to school, ... READ MORE >
Canada’s inflation declines amid cooling gas prices
Inflation declined by 0.3% in August for the second monthly decline in a row thanks to cooling gasoline and energy prices, according to data released by Statistics Canada on Tuesday. The consumer price index rose by 7.0% in August on a year-over-year basis, down from a 7.6% gain in July. The easing ... READ MORE >
Canada housing starts fall amid rising rates
Canada’s housing starts fell to 267,443 in August, a 3% drop from July, continuing the decline in the housing sector because of rising interest rates, according to data released on Friday by the Canada Mortgage and Housing Corporation. The drop, which stemmed entirely from starts of multiunit ... READ MORE >