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Gold prices jump 1% as U.S. CPI rises 7.7% for the year in October

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(Kitco News) – Gold prices are on the move, jumping 1% immediately following weaker-than-expected inflation numbers.

Thursday, the U.S. Labor Department said its much-anticipated Consumer Price Index rose 0.4% last month after a 0.4% rise in September. Economists were looking for an increase of 0.6%.

For the year, inflation pressures rose 7.7%, significantly below expectations for a 7.9% rise. In September, annual inflation was 8.2%.

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“This was the smallest 12-month increase since the period ending January 2022,” the report said.

The gold market is seeing a jolt of new momentum as the weak inflation data is shifting expectations for U.S. monetary policy. December gold futures last traded at $1,730.50 an ounce, up nearly 1% on the day.

Core inflation, which strips out food and energy prices, also showed signs of cooling, rising 0.3%, down from the 0.6% rise in September. Economists were expecting to see a 0.5% rise.

For the year, core inflation is up 6.3%, down from September’s annual increase of 6.6%.

Although inflation appears to be cooling, the report noted that consumers are still seeing rising food and energy costs. The Energy index rose 1.8% last month, with both gasoline and electricity prices rising; however, natural gas prices dropped.

At the same time, the food index increased 0.6% last month.

The report said that energy prices increased 17.6% for the year in October and food prices rose 10.9%.

“All of these increases were smaller than for the period ending September,” the report said.

Although inflation remains persistently high, the drop is having a significant impact on interest rate expectations. Economists note that lower inflation will give the Federal Reserve room to slow the pace of its aggressive rate hikes.

The CME FedWatch Tool shows markets now see a 73.5% chance the U.S. central bank will raise interest rates by 50 basis points next month. Ahead of the inflation, data markets were pricing in a 50/50 chance of a more aggressive move.

Paul Ashworth, Chief North America Economist, said that while the Federal Reserve will continue to raise interest rates into the new year, the latest inflation numbers could indicate that the tightening cycle is closer to ending.

“We expect this to mark the start of a much longer disinflationary trend that we think will convince the Fed to halt its tightening cycle early next year, with the policy rate peaking at 4.50% to 4.75%, and to begin cutting rates again before the end of 2023,” he said.

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Big banks raise prime lending rates to 6.7% after Bank of Canada hike

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Canada’s six biggest banks raised their prime lending rates following an eighth consecutive increase to the Bank of Canada’s benchmark interest rate.

The central bank’s target for the overnight rate now sits at 4.5 per cent following a quarter-point hike on Wednesday.

The central bank’s policy rate sets borrowing rates for other lending institutions, which feeds into terms for Canadian consumer loans like mortgages.

After Wednesday’s decision, TD Bank, Scotiabank, BMO, RBC, CIBC and National Bank all raised their prime lending rate by 25 basis points to 6.7 per cent.

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This marks the highest point for the prime lending rate in Canada since 2001, according to data from RateSpy.com.

Believing inflation is set to “decline significantly,” the Bank of Canada signalled Wednesday that it was ready for a pause after 425 basis points of hikes to its policy rate.

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Home Depot investigation: Data shared without consent

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OTTAWA –

Retailer Home Depot shared details from electronic receipts with Meta, which operates the Facebook social media platform, without the knowledge or consent of customers, the federal privacy watchdog has found.

In a report released Thursday, privacy commissioner Philippe Dufresne said the data included encoded email addresses and in-store purchase information.

The commissioner’s investigation discovered that the information sent to Meta was used to see whether a customer had a Facebook account.

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If they did have an account, Meta compared what the customer bought at Home Depot to advertisements sent over the platform to measure and report on the effectiveness of the ads.

Meta was also able to use the customer information for its own business purposes, including user profiling and targeted advertising, unrelated to Home Depot, the commissioner found.

It is unlikely that Home Depot customers would have expected their personal information to be shared with a social media platform simply because they opted for an electronic receipt, Dufresne said in a statement.

He reminded companies that they must obtain valid consent at the point of sale to engage in this type of activity.

“As businesses increasingly look to deliver services electronically, they must carefully consider any consequential uses of personal information, which may require additional consent.”

Home Depot told the privacy commissioner it relied on implied consent and that its privacy statement, available through its website and in print upon request at retail outlets, adequately explained the company’s use of information. The retailer also cited Facebook’s privacy statement.

The commissioner rejected Home Depot’s argument, saying the privacy statements were not readily available to customers at the checkout counter, adding shoppers would have no reason to seek them out.

“The explanations provided in its policies were ultimately insufficient to support meaningful consent,” Dufresne said.

He recommended that Home Depot stop disclosing the personal information of customers who request an electronic receipt to Meta until it is able to put in place measures to ensure valid consent.

Home Depot fully co-operated with the investigation, agreed to implement the recommendations and stopped sharing customer information with Meta in October, the commissioner said.

This report by The Canadian Press was first published Jan. 26, 2023.

 

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Meta funds a limited number of fellowships that support emerging journalists at The Canadian Press.

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Rent increased more than 18% last year for new tenants, new numbers show

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A surge in demand pushed Canada’s rental market to its tightest level in two decades last year, with the vacancy rate in purpose-built apartments dipping below two per cent and rent for new tenants going up by 18 per cent.

Those were some of the main takeaways from the Canada Mortgage and Housing Corporation’s annual report on the state of Canada’s rental market.

The figures cited above were for purpose-built rental apartments, so they don’t include what’s happening in condos, or in apartments built out of occupied family homes.

For purpose-built rentals, the national vacancy rate fell to 1.9 per cent last year, its lowest level since 2001.

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Booming demand for apartments pushed up the price to get one, too, with the average rent hitting $1,258 a month. That was up by 5.6 per cent from the previous year’s level, and roughly twice the annual average seen for the past 30 years.

But rent didn’t go up at the same pace for every unit.

Apartments where there was a change in tenants saw the rent go up by 18.9 per cent. Those where there was no change in tenancy saw rents go up by only 2.9 per cent, on average. “This reflects the fact that, once a tenant vacates a unit, landlords are generally free to increase asking rents to current market levels,” the CMHC said.

That gap was even more stark in two of Canada’s biggest cities, Toronto and Vancouver, where average rents for a unit that saw a tenant change went up by 29 and 24 per cent, respectively.

Geordie Dent, the executive director of the Federation of Metro Tenants Association, has spent more than a decade as a watchdog for the rental market in Toronto. He says the situation is as dire as he’s ever seen, with a surge in so-called “renovictions,” where landlords are eager to take advantage of higher market rents by evicting tenants and raising rents to someone new

“There’s an incentive for them to try to illegally evict people and raise the rent,” he told CBC News in an interview. He says he hears stories every day of people staying in unsuitable housing situations because of desperation. “They’re afraid that if they get kicked out of their current place for a new one, rent’s going to be like $1,000 higher.”

 

Geordie Dent, the executive director of the Federation of Metro Tenants’ Association, says the situation in Toronto’s rental market is the worst he’s ever seen.

Things aren’t much better across the country in Vancouver, either. The vacancy rate fell to just 0.9 per cent, with the average price for a two-bedroom hitting $2,002 a month. That’s up by 5.7 per cent from last year, but it’s up by 24 per cent among units that have seen a tenancy change.

Some of those in the lower mainland’s rental market fear the system is irreparably broken.

Vinny Cid was working and living in Victoria, but when his job allowed him to work remotely in 2021, he made the decision to move home with his parents.

He, his sibling and his two parents share a rental home in Richmond, B.C. for $2,800 a month which suits their needs, but he says they are only able to get that because his parents have lived in the unit since 2016.

“The rental situation has devolved quickly,” he told CBC News in an interview Thursday. “I check rental listings almost daily, and something similar today would cost $4,000 or more.”

“It’s depressing to see how prices have spiraled out of control very quickly,” he said.

While his situation works for him for now, should his employment or needs change, he suspects he would have to leave the province, or even the country. And he says he worries for those who don’t have the income and family support he has.

“Everybody is being told to either improvise or get pushed out,” he said. “In terms of outlook, it doesn’t look good.”

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