A long-anticipated economic slowdown in Canada could be underway, according to a new report.
RBC Economics released a report Wednesday indicating that Canada’s economy faces various headwinds in the form of elevated interest rates and a slowing global economy. The report noted that gross domestic product (GDP) moved 0.2 per cent lower in the second quarter of the year and early indications highlight the potential for another decline in the third quarter.
The report found indications that a “long expected ‘mild’ economic downturn may have already begun.”
“Indeed, economic growth already looks dramatically softer in the context of a surging population. On a per-person basis, Canadian GDP has now declined for four straight quarters,” the report said.
Notably, the economists highlighted that the 0.5-per-cent increase in Canada’s unemployment rate over the past four months marks the largest increase, excluding the pandemic, since the 2008-2009 recession.
Since the 1970s, the report said there have only been six instances of jobless rates rising that much in a short period, four of which occurred during a recession.
“Though employment growth has slowed, it was still up 19,000 per month over the last four months. But the number of job openings is drifting lower, signalling that labour demand is flagging,” the report said.
Amid current economic conditions, the report said Bank of Canada officials have been highlighting the “one and only” policy directive of the central bank to keep inflation at two per cent. However, the report said price pressures in Canada remain “sticky.”
“Amid a softening in GDP growth and labour markets we expect the BoC [Bank of Canada] to stay on the sidelines, holding rates steady into 2024,” the report’s authors said.
CANADIAN CONSUMERS
Amid economic uncertainty, the report highlighted that consumer spending was “essentially unchanged” in the second quarter and is expected to slow down further in the third quarter.
“Spending on goods has softened significantly with retail sales volumes falling three per cent at an annualized rate in the second quarter,” the report said.
“Though spending on services has been stronger, it’s also showing signs of slowing down.”
TORONTO – Strength in the base metal and technology sectors helped Canada’s main stock index gain almost 100 points on Friday, while U.S. stock markets also climbed higher.
The S&P/TSX composite index closed up 93.51 points at 23,568.65.
In New York, the Dow Jones industrial average was up 297.01 points at 41,393.78. The S&P 500 index was up 30.26 points at 5,626.02, while the Nasdaq composite was up 114.30 points at 17,683.98.
The Canadian dollar traded for 73.61 cents US compared with 73.58 cents US on Thursday.
The October crude oil contract was down 32 cents at US$68.65 per barrel and the October natural gas contract was down five cents at US$2.31 per mmBTU.
The December gold contract was up US$30.10 at US$2,610.70 an ounce and the December copper contract was up four cents US$4.24 a pound.
This report by The Canadian Press was first published Sept. 13, 2024.
OTTAWA – Statistics Canada says wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, rose 0.4 per cent to $82.7 billion in July.
The increase came as sales in the miscellaneous subsector gained three per cent to reach $10.5 billion in July, helped by strength in the agriculture supplies industry group, which rose 9.2 per cent.
The food, beverage and tobacco subsector added 1.7 per cent to total $15 billion in July.
The personal and household goods subsector fell 2.5 per cent to $12.1 billion.
In volume terms, overall wholesale sales rose 0.5 per cent in July.
Statistics Canada started including oilseed and grain as well as the petroleum and petroleum products subsector as part of wholesale trade last year, but is excluding the data from monthly analysis until there is enough historical data.
This report by The Canadian Press was first published Sept. 13, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in the base metal and energy sectors, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 172.18 points at 23,383.35.
In New York, the Dow Jones industrial average was down 34.99 points at 40,826.72. The S&P 500 index was up 10.56 points at 5,564.69, while the Nasdaq composite was up 74.84 points at 17,470.37.
The Canadian dollar traded for 73.55 cents US compared with 73.59 cents US on Wednesday.
The October crude oil contract was up $2.00 at US$69.31 per barrel and the October natural gas contract was up five cents at US$2.32 per mmBTU.
The December gold contract was up US$40.00 at US$2,582.40 an ounce and the December copper contract was up six cents at US$4.20 a pound.
This report by The Canadian Press was first published Sept. 12, 2024.
