Inflation spikes higher during war and economic conflict. Price dislocation, price controls and self-rationing are facts of life during wartime. Today, with inflation at a 40-year high and a policy rate pinned to the zero boundary, policymakers face significant constraints as they try to find ways ... READ MORE >
oil prices
Chart of the day: Consumer sentiment slides amid energy shock
Consumer sentiment slid further in March, falling by 3.1 points from February amid spikes in oil and gasoline prices. The University of Michigan sentiment gauge dropped to 59.7, an 11-year low, according to data released Friday. The decline was only slightly lower than our forecast of a 3.2-point ... 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 >
Energy shock will hit low-income Americans the hardest
The Russian invasion of Ukraine has sent oil prices skyrocketing to their highest level since 2008. In fewer than 10 days, oil prices have increased by 30%, surpassing our recent base-line model for a 20% oil price shock, which we estimated would push inflation above 10% this year. Despite such a ... 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 >
Chart of the day: Wholesale gas prices Imply 10.4% Increase at the pump
Geopolitical tensions linked to Russia’s invasion of Ukraine have roiled oil markets around the world. The global Brent crude benchmark has traded around $115 per barrel and the domestic West Texas Intermediate benchmark stood at $112. A year ago, those prices hovered around $60. The elevated levels ... READ MORE >
U.S. consumers spend more in January, defying inflation
Personal spending rebounded in January even as inflation rose at the highest rate in decades. Consumers looked past the omicron surge to spend more for the first time in three months on an inflation-adjusted basis. Spending rose 2.1% on the month, and 1.5% after adjusted for price increases while the ... READ MORE >
Energy shock: Potential impact of Russian invasion of Ukraine
A tight oil market and potential spillover from geopolitical competition has unnerved investors over the past few months, sending oil prices to elevated levels not observed in years. The price of oil has almost doubled since the start of last year and, given current tensions, is poised to move higher. ... READ MORE >
Canada runs a trade deficit as imports surge
Canada’s merchandise trade balance in December turned to a deficit after six consecutive monthly surpluses as imports of consumer goods surged and oil prices dropped, according to data released by Statistics Canada on Tuesday. Import and export values reached record highs last year because of higher ... READ MORE >
Chart of the day: With oil prices elevated, will U.S. production follow?
The high price of gasoline has become a major economic concern for Americans. Rising energy prices are expected to restrict household spending and disproportionately hit low-income consumers. Given the decline in oil prices over the past two weeks, gasoline prices are expected to follow, which ... READ MORE >