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A More Normal Jobs Report In October Statistics Canada released the October Labour Force Survey this morning, reporting a slowdown in employment growth from the blockbuster pace of recent months. While some commentators were disappointed in the results, I have a more positive take. Canada returned its pre-pandemic level of employment in September ahead of…

Bank of Canada Responds To Mounting Inflation: Ends QE and Hastens Timing of Rate Hike The Bank of Canada surprised markets today with a more hawkish stance on inflation and the economy. The Bank released its widely anticipated October Monetary Policy Report (MPR) in which its key messages were: The Canadian economy has accelerated robustly…

Prices are Rising Everywhere–Transitory Can Last A Long Time Today’s release of the September Consumer Price Index (CPI) for Canada showed year-over-year (y/y) inflation rising from 4.1% in August to 4.4%, its highest level since February 2003. Excluding gasoline, the CPI rose 3.5% y/y last month. The monthly CPI rose 0.2% in September, at the…

Canadian Home Prices Continued to Rise As Insufficient Supply Creates Excess Demand Today the Canadian Real Estate Association (CREA) released statistics showing national existing-home sales rose 0.9% between August and September 2021, posting the first monthly gain since March (see chart below). On a year-over-year (y-o-y) basis, the number of transactions last month was down 17.5%. Nevertheless,…

Blockbuster September Jobs Report–Further Fuel For Rising Interest Rates Statistics Canada released the September Labour Force Survey this morning, providing some unmitigated good news on the jobs front. Employment rose by 157,000 (+0.8%) in September, the fourth consecutive monthly increase. The unemployment rate fell by 0.2 percentage points to 6.9%. Employment gains in September were concentrated in full-time work and among people…

Home Prices Still Rising As Falling Sales Reflect Insufficient Supply Today the Canadian Real Estate Association (CREA) released statistics showing national existing home sales fell a slight 0.5% nationally from July to August 2021–the fifth consecutive monthly decline. Over the same period, the number of newly listed properties edged up 0.8%, and the MLS Home Price Index rose…

Annual Inflation In August Rises to 4.1% in Canada–But Are We Close To The Peak? Today’s release of the August Consumer Price Index (CPI) for Canada posted another uptick in the year-over-year (y/y) inflation rate, but hidden in the details was some support for the Bank of Canada’s position that the spike in inflation is…

August Employment Report Showed Continuing Recovery This morning, Statistics Canada provided us with some much-needed good news on the economic front following last week’s surprisingly dismal Q2 GDP report. Canada’s labour market continued its recovery in August, especially in the hardest-hit food services and accommodation sectors. The August Labour Force Survey (LFS) data reflect conditions…

Bank of Canada Responds To Weak Q2 Economy–Holding Policy Steady As we await the quarterly economic forecast in next month’s Monetary Policy Report, the Bank of Canada acknowledged that the Q2 GDP report, released last week, caught them off-guard. In today’s policy statement, the Governing Council of the Bank said, “In Canada, GDP contracted by…

Housing Dampened Economy in Q2 This morning’s Stats Canada release showed that the economy unexpectedly contracted in the second quarter by 1.1%, down from the revised 5.5% gain in the first three months of the year. The Canadian dollar dipped on the news to $.7921 as questions of resiliency in the face of the delta…