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Omicron takes a heavy toll on employment The Omicron outbreak took a larger toll on the labour market than anticipated in January but, as many of the coronavirus restrictions have already been lifted, employment will bounce back this month. The 200,000 …
4th February 2022
GDP surpasses pre-pandemic level in November The stronger-than-expected rise in November means that GDP climbed back above its pre-pandemic level, but activity appears to have stagnated in December and November’s gain was likely reversed in January amid …
1st February 2022
Modest gain flattered by jump in gasoline sales The rise in retail sales in November was not as strong as it looks, and the preliminary estimate suggests that sales fell sharply in December amid the Omicron wave. They are likely to fall further this …
21st January 2022
Inflation reaches 30-year high, but details more encouraging Inflation rose to a 30-year high of 4.8% in December but is now close to a peak. We expect it to remain near its current level in the first quarter, before it falls sharply over the remainder of …
19th January 2022
Inflation expectations rise as capacity constraints worsen The Bank of Canada’s latest business and consumer surveys suggest the upside risks to inflation over the next couple of years have increased, and raise the chance that the Bank will hike as soon …
17th January 2022
Manufacturing sales likely to drop back again amid Omicron wave Manufacturing sales rose strongly for the second month running in November, but the disruption to labour supply from the Omicron wave presents a clear downside risk to output in December and …
Decent December to be followed by much weaker January The strength of employment in December is mainly because the LFS reference week preceded the onset of the Omicron wave. Nevertheless, the fall in hours worked is probably a taste of what is to come, as …
7th January 2022
Goods trade surplus at 13-year high The jump in the goods trade surplus to a 13-year high in November is another sign that the flooding in British Columbia had only a small impact on overall economic activity. It confirms that the economy headed into the …
6th January 2022
Fourth quarter GDP growth to be stronger than expected The strong rise in GDP in October and preliminary estimate of another solid gain in November imply that fourth quarter GDP growth will be stronger than the Bank of Canada anticipated, and means the …
23rd December 2021
Strength in October and November unlikely to be repeated in December Retail sales rose strongly in October and the preliminary estimate points to another solid gain in November. That is likely to mark the peak for the next few months, however, as the …
21st December 2021
Underlying inflationary pressures still mounting Consumer prices rose at a more modest pace in November, but the increase in the Bank’s preferred measure of core inflation suggests that price pressures are broadening. Inflation was unchanged at 4.7% in …
15th December 2021
Restart of motor vehicle production boosts trade The restart of motor vehicle production across the continent boosted Canada’s exports and imports sharply in October, although there are downside risks to trade in November due to the infrastructure damage …
7th December 2021
Surge in employment makes April rate hike increasingly likely The surge in employment in November and the further strong gain in average earnings have arguably tipped the odds in favour of the Bank of Canada hiking interest rates in the first half of next …
3rd December 2021
Downward revision to Q2 flatters Q3 GDP growth We wouldn’t put too much weight on the stronger-than-expected pace of third-quarter GDP growth because it mainly reflects a downward revision to GDP in the second quarter. Nevertheless, the latest GDP data …
30th November 2021
Supply disruptions, warm weather and reduced policy support weigh on sales The ongoing supply chain disruptions and unseasonably warm weather explain most of the weakness of retail sales in September, but it seems likely that the winding down of fiscal …
19th November 2021
Further rise in inflation mainly due to energy prices Inflation rose to an 18-year high of 4.7% in October but, as this was driven primarily by higher energy prices and was in line with the Bank of Canada’s forecast, it is unlikely to shift the timing of …
17th November 2021
Cuts to motor vehicle production weigh heavily on manufacturing sales The renewed closures of auto plants weighed heavily on manufacturing sales in September. While many factories re-opened again this month, there is still a chance that overall …
15th November 2021
Employment growth slows as normalcy returns The 31,200 gain in employment in October represented a marked slowdown from the 157,000 increase the month before, but the underlying details were encouraging and there appears to be much less labour market …
5th November 2021
Surplus widens, as imports fall by more than exports The trade surplus widened to $1.9bn in September, from $1.5bn , which is better than we were expecting in light of the flash estimates suggesting that manufacturing sales declined last month and that …
4th November 2021
Third-quarter GDP growth weaker than expected GDP growth was weaker than expected in August and the preliminary estimate implies the economy stagnated last month. With third-quarter growth seemingly much weaker than the Bank’s latest forecasts imply, this …
29th October 2021
Strong August, but sharp decline in September highlights downside risks Retail sales increased markedly in August, as expected, but they appear to have fallen sharply in September and the expiry of the CRB presents a downside risk to spending over the …
22nd October 2021
Further rise in inflation due to supply disruptions Inflation rose further to 4.4% in September due to both renewed supply disruptions and the easing of travel restrictions. We do not expect the various supply disruptions that are pushing up goods prices …
20th October 2021
Mixed signals on inflation expectations and wage growth The Bank of Canada’s quarterly surveys point to significant upside risks to wage growth. That said, as wage growth was still low in September and the surveys suggest that longer-term inflation …
18th October 2021
Rise in manufacturing sales volumes probably reversed in September Manufacturing sales volumes were a bit stronger than we expected in August, but the renewed cuts to production at auto production plants in September suggest that sales volumes fell again …
14th October 2021
Wage growth still moderate despite strong employment gain The surprisingly strong gain in September means that employment is now back in line with its pre-pandemic level, but the still elevated unemployment rate and only moderate pace of wage growth …
8th October 2021
Improvement in trade surplus better than expected The large improvement in the trade surplus in August was much better than the consensus estimate of a small deterioration, but we are wary about suggesting that there are upside risks to our third-quarter …
5th October 2021
July better than expected, but Q3 GDP growth set to be relatively weak Despite the smaller-than-expected decline in GDP in July and the strong preliminary estimate for August, third-quarter GDP growth still looks to be much weaker than the Bank of Canada …
1st October 2021
Fall in retail sales not as bad as it seems Retail sales fell in July, but that was mainly because consumers switched back to spending on services as the coronavirus restrictions were eased. In any case, the preliminary estimate suggests that retail sales …
23rd September 2021
Further rise in inflation mainly due to supply disruptions Inflation rose by more than expected last month but, with the gain mainly due to the ongoing supply disruptions, the Bank of Canada will remain comfortable with its view that elevated inflation is …
15th September 2021
Manufacturing sales volumes likely to remain depressed for rest of year Manufacturing sales fell in July and the renewed closures of auto plants across the continent, and the recent falls in some commodity prices, mean they are unlikely to recover …
14th September 2021
Employment rises but hours worked little changed The easing of coronavirus restrictions helped drive a 90,000 increase in employment in August, but the unchanged level of hours worked is further evidence that third-quarter GDP growth is likely to be …
10th September 2021
Trade balance deteriorates, but remains in surplus The trade surplus was lower than expected in July, although expectations probably shifted following the preliminary GDP estimate released earlier this week, which showed a surprise fall in GDP in July. …
2nd September 2021
GDP unexpectedly falls in Q2 and again in July The unexpected fall in second-quarter GDP means that there is little chance the Bank of Canada will press on with its tapering plans next week, particularly as the preliminary estimate implies GDP also fell …
31st August 2021
Re-opening drives strong rebound in sales The re-opening of non-essential stores drove a 4.2% m/m rise in retail sales in June. While the preliminary estimate for July suggests retail sales dropped back again, that was most likely because consumers …
20th August 2021
House price inflation close to a peak The Teranet measure of house price inflation accelerated to a 32-year high in July and is on track to pick up further in August. That should mark the peak but, with the sales-to-new listing ratio still elevated and …
19th August 2021
Re-opening and supply constraints lift inflation Inflation jumped to 3.7% in July as the coronavirus restrictions were eased and global supply chain issues pushed up goods prices. As the Bank of Canada’s preferred measure of core inflation was unchanged …
18th August 2021
Slow recovery in store for manufacturing sales Manufacturing sales started to rebound in June but, with the global semiconductor shortage set to ease only gradually, it is likely to be a slow recovery for manufacturing sales volumes. The 2.1% m/m rise in …
16th August 2021
Solid rebound in total hours worked shows impact of reopening The 94,000 increase in LFS employment in July was something of a disappointment given the lifting of coronavirus restrictions at the start of the month in many provinces, but the solid 1.3% m/m …
6th August 2021
Goods trade surges to biggest surplus since financial crisis The merchandise trade position returned to surplus in June thanks to a massive 8.7% m/m surge in exports, which suggests that second-quarter GDP growth was even stronger than the 2.5% annualised …
5th August 2021
Growth to accelerate following second-quarter expansion of 2.5% The monthly data suggest that GDP expanded by 2.5% annualised in the second quarter, despite the lockdowns in April and May, and the likely 0.7% m/m gain in June will provide a strong …
30th July 2021
Inflation to rebound soon Consumer prices increased only marginally in June but, as firms’ selling price expectations are currently very elevated, we continue to expect inflation to rebound back toward 4% soon. The consumer price index rose by just 0.1% …
28th July 2021
Sales fell again ahead of June rebound Retail sales fell again in May but the preliminary estimate suggests they rebounded strongly in June as non-essential stores re-opened. Consumers may transition away from spending on goods as the restrictions on …
23rd July 2021
Housing market to lose momentum in second half of the year House price inflation accelerated to 16% y/y in June but, with the sales-to-new listing ratio falling in recent months, price inflation will peak in the second half of the year. The 2.7% m/m rise …
20th July 2021
Manufacturing still struggling due to shortages Manufacturing sales fell again in May as the global supply shortages continued to take their toll. While those shortages should ease in the second half of the year, the rebound in production is set to be …
14th July 2021
Easing of restrictions lifts employment, but hours worked disappoints The stronger-than-expected rise in employment in June confirms that labour shortages are not holding back the recovery, but the weakness in hours worked still suggests there are …
9th July 2021
Consumers and firms expect rise in inflation to be temporary The Bank of Canada’s latest surveys show more evidence of inflationary pressures building but, given firms and consumers expect higher inflation to be temporary, the Bank is unlikely to be too …
5th July 2021
Semiconductor shortage weighs on exports Exports were weaker than expected in May, but that was largely due to the ongoing global semiconductor shortage rather than weakening external demand. And with the rise in imports boding well for domestic demand, …
2nd July 2021
GDP not as weak as first thought The 0.3% m/m decline in GDP in April was smaller than Stats Can initially suggested and implies that, despite the third coronavirus wave, the economy held up relatively well. We now expect second-quarter GDP growth to be …
30th June 2021
Sales fell sharply in April and again in May The recent lockdowns caused retail sales to plunge by 5.7% in April and the preliminary estimate implies they fell sharply in May as well. The outlook is much brighter, with the record level of consumer …
23rd June 2021
Housing, re-opening and supply constraints lifting inflation The rise in inflation to 3.6% in May was driven by several factors including ongoing global supply constraints, the booming housing market, and the start of the re-opening process. While …
16th June 2021