The Bank of Canada held its overnight interest rate at 1.75% on Wednesday as the central bank kept its powder dry ahead of an uncertain path of growth in the domestic economy in 2020. The tone of the policy statement would imply that the Bank of Canada stands ready to cut rates to bolster the domestic economy should growth slow. Given that the ... READ MORE >
Joseph Brusuelas
USMCA is a solid opportunity for the middle market
The new North American trade agreement represents a solid opportunity for American middle market firms to expand their participation in the regional and global economies. The pact, called the United States-Mexico-Canada Agreement, includes a chapter dedicated to small and medium enterprises – a first for a multilateral trade agreement – and also adopts a ... READ MORE >
The Bank of Canada’s dilemma — stability versus rate cut
Canadian money markets imply that the Bank of Canada will remain on hold at 1.75% at the interest rate announcement on Jan. 22. The implied probability of a rate change that day is nearly zero, according to the futures market. But we do think that the decision is a close call. While maintaining the overnight rate at 1.75% would appear to be prudent at the ... READ MORE >
Retail sales close out year on a positive note
The health of the American consumer remains strong as outlays on retail sales closed out the year on a positive note with plenty of room for upward revisions. U.S. December advance retail sales increased 0.3% on a month-over-month basis and was up 6% on a year-ago basis. The control group that is used to estimate household spending inside the GDP ... READ MORE >
U.S. added 145,000 jobs in December as women now outnumber men in the workforce
Hiring in the economy closed out the year with a gain of 145,000 jobs in December, making for an overall increase of 2.1 million in 2019, the Labor Department reported on Friday. But most notable in the report was a milestone in the rise of women in the labor force. For the first time since 2010, women comprise the majority of workers, holding 50.04% of ... READ MORE >
Jobs report preview: Expect a cooler December
After a blowout jobs report in November, we expect things will have cooled off a bit when the December jobs figures are released on Friday. We expect a net gain of 145,000 in December hiring with downside risk linked to late-year seasonal adjustments and a slower pace of hiring. This slower pace is implied by the economic data within the ISM Service ... READ MORE >
Increased shale production partially insulates American economy from Iran conflict
The reaction to the killing of Iranian Major General Qassim Suleimani, the commander of Iran’s Revolutionary Guards Corps, across oil, energy and financial markets has been muted. For now, investors are focused on the supply component of the global oil equation. American shale oil production has changed significantly in just the past four years, ... READ MORE >
Boeing’s stopping of 737 Max production will affect far more than just Boeing
Boeing’s announcement this week that it would halt production of its troubled 737 Max in January 2020 will have an impact that extends far beyond its own business, and will most likely shave 0.5% off first-quarter GDP in the United States. The damage will ripple throughout the economy, affecting everything from inventory channels, factory orders, industrial ... READ MORE >
RSM Brexit Stress Index plunges as Johnson gains clear victory
Stress in the British financial markets plummeted as voters handed the Conservatives and Prime Minister Boris Johnson a clear victory on Thursday, signaling an end to years of gridlock over Brexit. The RSM Brexit Stress Index, which measures financial and economic risk surrounding Britain’s impending departure from the European Union, dropped to an ... READ MORE >
Fed leaves rates unchanged and points to shift on inflation target
The Federal Open Market Committee on Wednesday said it had retained its accommodative policy stance by keeping the federal funds rate in a range between 1.5% and 1.75%. Based on recent strong labor market reports, the Fed revised its unemployment forecast from 3.7% to 3.6% for 2019 and from 3.7% to 3.5% in 2020 in its December summary of economic ... READ MORE >