July 16, 2018

First Monthly Canadian Home Sales Gain This Year In June

National home sales rose by 4.1% in June compared to May, the first such rise this year. Even so, June’s sales activity remains well below the monthly pace of the past five years (see chart). The sales gains were led by the Greater Toronto Area (GTA) as 60% of all local housing markets reported increased…

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July 11, 2018

Poloz Opens The Door For More Rate Hikes

As expected, the Bank of Canada hiked its key overnight rate this morning by 25 basis points to 1.5%. What wasn’t expected was the hawkish tone of the press release which brushed aside the threat of greater protectionism, instead emphasizing the need for higher interest rates to keep inflation near its target. In today’s Monetary…

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June 18, 2018

The Spring Housing Market Continues To Be Weak

As we said last month, April is usually the start of a spring housing market ramp-up, but this year the new mortgage stress test and rising mortgage rates have continued to be a negative factor. Those expecting an early-stage pick-up marking an end to the payback for sales pulled forward into the fourth quarter of…

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June 8, 2018

Canada’s May Job Loss in Manufacturing and Construction

Statistics Canada announced this morning that Canada’s employment was little changed in May, and the jobless rate remained at a low 5.8% for the fourth consecutive month. The headlines, however, highlighted the modest 7,500 job losses last month on the heels of a 1,100 job loss in April. The job declines are small in a…

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June 1, 2018

U.S. May Unemployment Rate Falls Again to 3.8%

Today’s May employment report showed the jobless rate dropping unexpectedly even further to 3.8%–considerably below the level the Fed once considered to be full employment. It wasn’t long ago that the Fed estimated the long-run equilibrium jobless rate in the range of 4.3%-to-4.7%. Economic theory tells us that very tight labour markets can generate inflation…

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May 31, 2018

Housing Slowdown and Wilting Consumers Dampened Q1 Canadian GDP Growth

This morning, Stats Canada released the first quarter GDP figures indicating a slowdown in growth in the first quarter to a 1.3% annual rate compared to 1.7% in the final quarter of last year. This was precisely what the Bank of Canada (BoC) forecast for Q1 in the April Monetary Policy Report (MPR). Yesterday, the…

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May 30, 2018

Poloz Opens The Door For A Rate Hike In July

As expected, the Bank of Canada held rates steady at 1.25% for the third consecutive month but said that first-quarter growth was stronger than expected and that developments since April suggest that higher interest rates will be warranted. The first quarter GDP numbers are out tomorrow morning, and it’s clear the Q1 growth will be…

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May 15, 2018

The Spring Housing Market Is Off To A Slow Start

April is usually the start of a spring housing market ramp-up, but this year the new mortgage stress test and rising mortgage rates have continued to be a negative factor. Those expecting an early-stage pick-up marking an end to the payback for sales pulled forward into the fourth quarter of last year have been sorely…

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May 11, 2018

Jobless Rate Remains At 40-Year Low As Wage Growth Accelerates

Statistics Canada announced this morning that employment was virtually unchanged in April (down 1,100) following a surge in March and the unemployment rate remained at 5.8%–its lowest level in four decades. Wages growth accelerated signalling tight labour markets. April’s stall was only the second time since mid-2016 that the job market did not grow. On…

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May 2, 2018

Rates Held Steady Now, But Gradual Hikes Signalled

The Federal Open Market Committee (FOMC) met this week for the second time under the chairmanship of Jerome Powell. In a unanimous decision, the Committee left the target range for the federal funds rate unchanged at 1-1/2 to 1-3/4 percent. Unlike the Bank of Canada, which has a single objective of targeting inflation at roughly…

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