The Bank of Canada needs to announce rate cuts during its June 5 meeting to spur economic growth. Any further delay and the bank would risk making a policy error and undermining Canada’s growth outlook. A 25-basis-point rate cut would kickstart the easing cycle, which will unfold gradually over the ... READ MORE >
economic growth
Labor data shows economic strength as inflation concerns linger
Despite a slowdown in productivity and rising labor unit costs, the economy continues to show strength with initial jobless claims staying near recent lows and factory orders posting solid growth. Initial jobless claims were unchanged last week at 208,000, according to the Bureau of Labor Statistics, ... READ MORE >
R-star: The role of the natural rate of interest in monetary policy and economic growth
The pandemic has spurred profound changes in the global economy like a tight labor market and elevated inflation that policymakers are only beginning to understand. But one result is clear: The days of historically low interest rates are over. Now, policymakers are wrestling with the question of ... READ MORE >
Private investment and the reintroduction of risk
The end of hyper-globalization heralds the end of an era of low inflation and low interest rates. Regime changes in global trade, growth and liquidity, along with a significant increase in geopolitical tensions, are reintroducing political and economic risk. To manage this risk, middle ... READ MORE >
Expectations at the end of business cycles
The Federal Reserve has a blunt yet effective instrument to fight inflation: raising the federal funds rate. But using it requires a delicate balancing act. In the best-case scenario, the Fed, by raising rates, reduces discretionary spending enough to stabilize prices, and the economy continues to ... READ MORE >
Q2 US GDP: Economy contracts for second consecutive quarter
The American economy contracted for the second consecutive quarter April through June, at a pace of 0.9% due to weak inventory accumulation and an outsize decline in gross private investment, according to data released Thursday from the Bureau of Economic Analysis. However, the fact that the economy grew ... READ MORE >
Canada GDP rose 0.4% in August as the economy reopened
Canada’s gross domestic product in August rose by 0.4% to CA$1.97 trillion, led by continued rising demand for client-facing business services, according to data released by Statistics Canada on Friday. The rise in spending on in-person services led the economic recovery, as August marked the first ... READ MORE >
GDP preview: 6% growth forecast with room to accelerate
We expect that the initial estimate of U.S. gross domestic product for the first quarter, to be released Thursday, will show 6% growth, which is somewhat below the Bloomberg consensus of 6.8%. A wider-than-anticipated trade deficit, which we expect to subtract 1.5% from overall growth, and a ... READ MORE >
Global economy to expand by 6% as vaccinations accelerate
The events that shook the global economy to its core last year—policy errors and a pandemic occurring at the end of a decade-long business cycle—finally appear to be bottoming out. Although those events are still running their course, the rapid response by the scientific community and by ... READ MORE >
RSM recovery watch: Upgraded growth forecast and more evidence of a turn in the business cycle
There are signs that the business cycle has made a turn, bottoming out of a deep recession and moving into its next phase of sustained economic growth. As such, we have recently upgraded our forecast for 2021 real GDP growth to 7.5% (7.2% previously) on a year-over-year basis, a decline in the ... READ MORE >