The Trudeau government goes into Monday’s election with momentum behind the prospects for economic growth and with the financial markets in a steady state. As the Bank of Canada noted in its Sept. 8 assessment, “Financial conditions remain highly accommodative.” But will the unintended consequences of that accommodation turn on itself? Our RSM Canada ... READ MORE >
Joseph Brusuelas
Consumer Price Index: Inflation eased in August, but it’s too soon to declare victory
Score a victory for team transitory in the inflation wars. The Consumer Price Index eased in August, reaffirming our view that inflation most likely formed a peak in the summer following the historic supply shock that defined pandemic economics starting last year. Top-line inflation eased to 5.3% on a year-ago basis, while increasing by a much more ... READ MORE >
Global supply chain disruptions accelerate, presenting a challenge to the middle market
Fragile global supply chains are facing another round of port closures, factory shutdowns, production halts and labor shortages as the delta variant spreads. These disruptions will almost certainly delay the return of full production in the global economy until the middle of next year and create the conditions for further price volatility until the ... READ MORE >
Chart of the day: How the enhanced child tax credit expands outlays on food, shelter and books
A survey by the U.S. Census Bureau adds to the argument that direct payments to households are the most efficient way to help families in need. The recent innovation in the child tax credit—taking half of it and turning it into six lump-sum payments over the course of a year—has yielded some interesting and economically relevant information. The ... READ MORE >
Initial jobless claims fall to 310,000, but expect volatility in the coming weeks
First-time claims for unemployment benefits declined to 310,000 for the week ending Sept. 4, down from 345,000 the week before and well below the 13-week moving average of 377,000. Continuing claims increased to 2.783 million for the week ending Aug. 28. Overall, those receiving some form of unemployment benefits stood at 11.9 million, according to ... READ MORE >
Budget brinkmanship as another debt-ceiling debacle looms
Once Congress returns from its summer recess this month, it will need to take up the funding of the government past Sept. 30, when the financing of its debt runs out at the end of the fiscal year. The short window between the start of the congressional calendar and the debt financing deadline carries with it the possibility of another debt ceiling ... READ MORE >
U.S. August employment report: Delta variant exerts a drag on hiring
What is obvious in the August jobs report that was released on Friday is that the delta variant has affected overall economic activity and hiring. Until a small portion of the public decides to get vaccinated, both the economy and hiring will be held hostage to the ebb and flow of the pandemic. The decisions of a few not to get vaccinated ... READ MORE >
Jobless claims: After the deluge
First-time jobless claims decreased to 340,000 for the week ending Aug. 28, from an upwardly revised 354,000 the week before, while continuing claims fell to 2.75 million, according to government data released on Thursday. While the weekly churn in the labor market is always of paramount interest, that churn is going to be a bit more in focus over the ... READ MORE >
RSM UK Financial Conditions Index: Gimme shelter
Financial conditions in the U.K. have settled into a groove that would be rivaled only by the late Charlie Watts. As a result of this stability, the RSM UK Financial Conditions Index in August moved to its highest level since 2014, reaching 1.1 standard deviations above levels of risk that are normally priced into financial assets. Volatility in ... READ MORE >
RSM Canada Financial Conditions Index: The global threat of a resurgent virus
Canada’s financial markets continued their cautious optimism in August despite the unexpected 1.1% decline in second-quarter gross domestic product because of declining demand in exports, supply chain constraints and residential investment. That economic surprise may slow those at the Bank of Canada who are eager to begin the long process of policy ... READ MORE >