Global Uncertainty Archives - Page 5 of 5

Inflation shows its stubborn side with bump in May

June 26, 2024/in Business And Economic Strength, Global Uncertainty, Inflation And Rising Costs/by Jim Zeeben

Inflation rose 2.9% on a year-over-year basis in May, up from a 2.7% rise in April.

The increase came as a surprise for many economists who are watching for the Consumer Price Index to return to the 2% target, which the Bank of Canada considers to be sustainable inflation.

Statistics Canada said May’s increase was caused by higher prices for services, specifically cellular services, rent and air fares.

“The increase in services inflation is not helpful, especially as wage growth is elevated. The risk of a strong rebound in the housing market hasn’t materialized yet, but slowing shelter inflation is welcome news,” Canadian Chamber Senior Economist Andrew DiCapua said. “Our consumer spending tracker is showing growth presenting a risk that demand is more robust. Odds of a cut in July are lower and still depend on whether the economy is weaker than the Bank’s recent forecast. Governing Council continues to be heavily data dependent, and this reversal will support their restrictive bias. The Bank will want to take a slow and measured approach, especially with inflation accelerating.”

The Consumer Price Index for June will be released on July 16, ahead of the next interest rate decision on July 24.

Lessons of past can help us improve future economy

June 19, 2024/in Business And Economic Strength, Global Uncertainty, Inflation And Rising Costs/by Jim Zeeben

Canada’s economy made a significant shift last month when the Bank of Canada dropped its interest rate for the first time in four years. Now the Bank’s governor is saying he and his central bank peers are navigating a new world.

“We’ve also learned some lessons from the post-pandemic inflation, and we will take these to heart,” Tiff Macklem told the International Economic Forum of the Americas on June 12. “But the challenges of the future are rarely the same as those of the past. Supply shocks are more likely in the future. New technologies not only have the potential to increase prosperity but also to disrupt. Interest rates may be easing in many economies, but global interest rates are unlikely to return to pre-pandemic levels. The new normal won’t be the old normal. And if we’re not going back, we’ll all need to adjust.”

Macklem said supply-side economics, inflation as a common enemy and public trust in the banking system are the biggest lessons learned from the past four years.

The Bank’s next interest rate announcement is set for July 24.

Canadian business optimism improving, survey finds

June 12, 2024/in Business And Economic Strength, Chamber Awareness, Global Uncertainty/by Jim Zeeben

The Business Expectations Index has moved into positive territory for the first time in a year. The index rose 2.7 points in the second quarter of 2024 from the first quarter, led by an improved outlook for sales.

Some of the key findings include:

Businesses expect employment to grow as labour market conditions continue to find a balance between supply and demand.
Eleven of 16 sectors are improving with finance and insurance leading the pack, followed by construction.
However, agriculture, information and culture, and transportation are contracting.
Firms with 1 to 4 employees say they are are stabilizing, though medium- and large-sized firms (100 or more employees) continue to be much more optimistic.
Among underrepresented groups, visible minorities are the most optimistic, while LGBTQ2+ and women business owners are more pessimistic.

Inflation shows its stubborn side with bump in May

Lessons of past can help us improve future economy

Canadian business optimism improving, survey finds

US Consul General meets Victoria business leaders

Index of Consumer Confidence reflects nation’s mood

Rising inflation still a threat to economy, Bank says

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