Little reason for central bank to abandon patient stance
The Canadian economy added 37,000 jobs in January and the unemployment rate fell to 5.7 per cent, according to figures released Feb. 9 by Statistics Canada. While that beat expectations of a 15,000-job gain, the picture wasn’t all rosy. Here’s what economists had to say about the report.
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“Beyond the shiny headlines, the details were underwhelming,” Douglas Porter, chief economist and managing director of economics at the Bank of Montreal, wrote in a note to clients following the release of the data. Porter noted that while the drop in the unemployment rate was a surprise, it had more to do with a declining participation rate than the increase in jobs, most of which came in the part time and/or public service categories. Nevertheless, the report was strong enough to keep the Bank of Canada on pause.
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“Perhaps the key takeaway from this mixed report is that there are no obvious signs of stress for the economy, at least in these results,” he wrote. “A decent job gain, a slide in the jobless rate, and persistent five per cent wage growth are hardly the stuff of an urgent call for rate cuts. The Bank of Canada is likely to view this report as further reason for a patient policy stance.”
TD Bank’s James Orlando was also skeptical of the headline numbers, noting that the “underlying details were weak” and also flagging that January’s jobs data is often subject to seasonal distortions. While the population surged by 126,000 people, there were only 18,000 net new entrants into the labour force.
“We’d argue that it is not the type of report the makes us think the Canadian labour market is in for a renewed upturn,” Orlando wrote.
“The Bank of Canada won’t change course after today’s report. The data are simply too volatile and don’t paint a clear picture of the state of the Canadian economy. This leaves the Bank of Canada to continue fixating on the state of inflation.”
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The renewed jump in population and steady wage growth in January caught the eye of Desjardins Group principal economist Marc Desormeaux.
“2024 is shaping up to be a year of rematches: the 49ers versus the Chiefs for the Super Bowl, Joe Biden versus Donald Trump for the U.S. presidency, and according to today’s data, hefty population and wage gains versus the Bank of Canada’s two per cent inflation target,” he wrote.
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Desormeaux noted that the population gains seemed to indicate ongoing demand for temporary workers, despite an overall softening of the labour market.
“For now, we’re sticking to our call that the Bank of Canada will begin reducing its policy rate in the second quarter of 2024… But as we begin the new year, there’s no question that high population and wage growth still present upside risks to inflation.”
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CALGARY – TC Energy Corp. has lowered the estimated cost of its Southeast Gateway pipeline project in Mexico.
It says it now expects the project to cost between US$3.9 billion and US$4.1 billion compared with its original estimate of US$4.5 billion.
The change came as the company reported a third-quarter profit attributable to common shareholders of C$1.46 billion or $1.40 per share compared with a loss of C$197 million or 19 cents per share in the same quarter last year.
Revenue for the quarter ended Sept. 30 totalled C$4.08 billion, up from C$3.94 billion in the third quarter of 2023.
TC Energy says its comparable earnings for its latest quarter amounted to C$1.03 per share compared with C$1.00 per share a year earlier.
The average analyst estimate had been for a profit of 95 cents per share, according to LSEG Data & Analytics.
This report by The Canadian Press was first published Nov. 7, 2024.
Companies in this story: (TSX:TRP)
The Canadian Press. All rights reserved.
BCE Inc. reported a loss in its latest quarter as it recorded $2.11 billion in asset impairment charges, mainly related to Bell Media’s TV and radio properties.
The company says its net loss attributable to common shareholders amounted to $1.24 billion or $1.36 per share for the quarter ended Sept. 30 compared with a profit of $640 million or 70 cents per share a year earlier.
On an adjusted basis, BCE says it earned 75 cents per share in its latest quarter compared with an adjusted profit of 81 cents per share in the same quarter last year.
“Bell’s results for the third quarter demonstrate that we are disciplined in our pursuit of profitable growth in an intensely competitive environment,” BCE chief executive Mirko Bibic said in a statement.
“Our focus this quarter, and throughout 2024, has been to attract higher-margin subscribers and reduce costs to help offset short-term revenue impacts from sustained competitive pricing pressures, slow economic growth and a media advertising market that is in transition.”
Operating revenue for the quarter totalled $5.97 billion, down from $6.08 billion in its third quarter of 2023.
BCE also said it now expects its revenue for 2024 to fall about 1.5 per cent compared with earlier guidance for an increase of zero to four per cent.
The company says the change comes as it faces lower-than-anticipated wireless product revenue and sustained pressure on wireless prices.
BCE added 33,111 net postpaid mobile phone subscribers, down 76.8 per cent from the same period last year, which was the company’s second-best performance on the metric since 2010.
It says the drop was driven by higher customer churn — a measure of subscribers who cancelled their service — amid greater competitive activity and promotional offer intensity. BCE’s monthly churn rate for the category was 1.28 per cent, up from 1.1 per cent during its previous third quarter.
The company also saw 11.6 per cent fewer gross subscriber activations “due to more targeted promotional offers and mobile device discounting compared to last year.”
Bell’s wireless mobile phone average revenue per user was $58.26, down 3.4 per cent from $60.28 in the third quarter of the prior year.
This report by The Canadian Press was first published Nov. 7, 2024.
Companies in this story: (TSX:BCE)
The Canadian Press. All rights reserved.
TORONTO – Canada Goose Holdings Inc. trimmed its financial guidance as it reported its second-quarter revenue fell compared with a year ago.
The luxury clothing company says revenue for the quarter ended Sept. 29 totalled $267.8 million, down from $281.1 million in the same quarter last year.
Net income attributable to shareholders amounted to $5.4 million or six cents per diluted share, up from $3.9 million or four cents per diluted share a year earlier.
On an adjusted basis, Canada Goose says it earned five cents per diluted share in its latest quarter compared with an adjusted profit of 16 cents per diluted share a year earlier.
In its outlook, Canada Goose says it now expects total revenue for its full financial year to show a low-single-digit percentage decrease to low-single-digit percentage increase compared with earlier guidance for a low-single-digit increase.
It also says it now expects its adjusted net income per diluted share to show a mid-single-digit percentage increase compared with earlier guidance for a percentage increase in the mid-teens.
This report by The Canadian Press was first published Nov. 7, 2024.
Companies in this story: (TSX:GOOS)
The Canadian Press. All rights reserved.
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