Policy normalization at the Federal Reserve took a giant step forward on Wednesday as the Federal Open Market Committee hiked the federal funds rate by 25 basis points to between 25 and 50 basis points while slashing its growth forecast and increasing its estimate of inflation. The announcement ... READ MORE >
coronavirus
Preview of coming attractions: Inflation surges to 7.9%
The February consumer price index provided an unpleasant preview of coming attractions in the U.S. economy as top-line inflation soared by 0.8% on the month, pushing the year-ago reading to 7.9%, the fastest rate in 40 years. It is important to note that the February estimation of inflation ... READ MORE >
Consumer choice, self-rationing and preparing for shortages
The war in Ukraine, the cutoff of Russian exports and the possible removal of roughly 4.3 million barrels of crude from U.S. and European markets are likely to have a harmful impact on household balance sheets. Should the conflict continue, we expect it will result in price increases for everything ... READ MORE >
Chart of the day: Job openings surpass 11 million in back-to-back months
The scramble by employers to find workers continued amid a historically tight labor market in January, as employers reported 11.3 million job openings for the month, according to government data released on Wednesday. That would have been the highest on record, except that December's figure was revised ... READ MORE >
U.S. February jobs report: Bittersweet symphony as employment rises by 678,000
Despite a net increase in total employment of 678,000 and a decline in the unemployment rate to 3.8% in February, the improvement in the American labor market is now in the rearview mirror as the impact of geopolitical tensions, searing economic sanctions, rising inflation and surging oil prices sets ... READ MORE >
The impact of an energy shock on Canada’s economy
As geopolitical conditions worsen and the human toll of Russia’s invasion of Ukraine mounts, the economic impact is rising as well, especially on global energy markets. Though the impact on Canada’s gross domestic product will be minimal thanks to Canada’s strong energy industry, consumers and ... READ MORE >
Service sector moderated amid rising prices and labor crunch
The service sector registered slower growth in February as inflation and labor shortages remained top concerns, according to a report from the Institute for Supply Management on Thursday. The services purchasing managers’ index declined 3.4 percentage points to 56.5 on the month, but for the 21st month ... READ MORE >
Initial jobless claims at lowest point since December as omicron retreats
New filings for jobless benefits fell below the pre-pandemic level for the first time since December as the economy continued to recover from the omicron surge, according to government data released Thursday. New filings—a proxy for layoffs—dropped to 215,000 for the week ending Feb. 26 from an ... READ MORE >
Bank of Canada raises rates in response to inflation
The Bank of Canada announced on Wednesday that it would raise its overnight rate to 0.5%, 25 basis points from the lower bound policy rate of 0.25%, to tackle inflation. This marks the first rate hike in more than three years. The bank, however, said it would keep its holdings of bonds on its balance ... READ MORE >
Chart of the day: Manufacturing grows as supply chains improve
The manufacturing sector expanded in February as the economy continued a strong rebound. The manufacturing purchasing managers’ index rose 1 percentage point to 58.6 in February, registering the 21st consecutive month of growth, the Institute for Supply Management reported on Tuesday. The sector has ... READ MORE >