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Economists expect inflation continued its downward trend last month, giving the Bank of Canada the all-clear to continue cutting its benchmark interest rate.

“We are looking for headline inflation to cool below the bank’s two-per-cent target in September,” said BMO economist Shelly Kaushik.

Kaushik said she expects annual headline inflation cooled to 1.8 per cent, largely thanks to lower gas prices last month, but added that as pump prices rose in October, the headline number could tick higher in the following report.

The latest report on consumer price growth is set to be released Tuesday, and is the last big economic report before the Bank of Canada’s next interest rate decision on Oct. 23.

TD Bank senior economist James Orlando said he sees headline inflation slowing to 1.9 per cent in September, with core measures of inflation remaining above two per cent.

“Now that we’re back at target, it’s more like, well, how do we stick around here?” he said.

In August, inflation hit the Bank of Canada’s two-per-cent target, falling from 2.5 per cent year-over-year in July to reach its lowest level since February 2021. Lower gasoline prices underpinned the decline.

Underlying inflation pressures are continuing to slow, said Nathan Janzen, assistant chief economist at RBC, but shelter costs, especially mortgage payments, have continued to put upward pressure on the overall number.

However, that pressure is slowly easing as interest rate cuts begin working their way through the economy, he said — though the mortgage interest component of inflation will remain high for a while.

“It takes time for market rate changes to impact five-year, fixed-rate mortgage payments through renewals, and so you’ll still have further increases in mortgage costs. But they are getting smaller,” said Janzen, who also sees headline inflation hitting 1.8 per cent in September.

The Bank of Canada started hiking interest rates in March 2022 to fight inflation, hitting pause mid-2023 at five per cent before beginning cuts this past June.

It has now cut rates three times this year and is expected to continue cutting as other areas of the economy, such as the labour market, have weakened.

However, the labour market was surprisingly stronger in September, adding more than twice as many jobs as in August, while the unemployment rate ticked lower to 6.5 per cent.

Looking at the broader trend, though, the jobs market has steadily weakened, which is another reason why many economists say the Bank of Canada is all but certain to cut in both October and December.

The question is how big that cut will be.

So far, the central bank has only made cuts by a quarter of a percentage point, but recently, its U.S. counterpart kicked off its easing campaign with a more aggressive half-point reduction.

Orlando sees the Bank of Canada cutting by a quarter-point this month and in December.

“Nothing in the data right now (is) saying that you need to speed up those rate cuts,” he said.

The Bank of Canada is more focused on the labour market now than on inflation, said Orlando. But Friday’s jobs report wasn’t as weak as many feared, he said, and “echoes everything else we’ve been seeing in the economy, that a quicker pace of rate cuts isn’t necessary.”

Some think the central bank could take a more aggressive tack — Janzen sees two larger-sized cuts of half a percentage point each in October and December, even after Friday’s jobs report.

“I think there’s just growing evidence that interest rates are higher than they need to be, and potentially substantially higher than they need to be,” he said.

Kaushik said while she forecasts two smaller cuts this year, she thinks a half-percentage-point cut isn’t out of the question.

“The question of 25 versus 50 basis points (is) still very much up in the air,” she said.

Bank of Canada governor Tiff Macklem signaled in September that the central bank could make more sizable cuts if economic weakness persists.

“With inflation getting closer to the target, we need to increasingly guard against the risk that the economy is too weak and inflation falls too much,” he said after announcing a rate cut on Sept. 4.

Also on Friday, the Bank of Canada’s latest surveys on consumer and business outlooks found both remained subdued, with consumers less pessimistic about their finances but still reducing spending.

This report by The Canadian Press was first published Oct. 13, 2024.

WEST BEND, Wis. – Mary Herrick has lived in Washington County, just outside of Milwaukee, for 50 years but during a recent lunch with a close friend there was an uncomfortable moment: Herrick said she was going to vote for Vice-President Kamala Harris and her friend said she would be voting for former president Donald Trump.

“I think my jaw probably hit the floor,” Herrick, 76, said in a recent interview from her home in West End.

The upcoming election has caused relationships to fracture as Americans deal with intensifying political polarization. The division, heightened by social media echo chambers, has spilled into friend groups and families where political ideology is pushing people apart.

“I just couldn’t say anything,” Herrick said about how the conversation with her friend ended. “I just don’t understand why people would vote for him.”

The country’s two major parties sit at virtual parity. About half of registered voters, 49 per cent, lean toward the Democratic party, while 48 per cent identify as Republicans, according to the Pew Research Center.

Political parties used to be ideologically heterogeneous, said the University of Pennsylvania’s Marc Trussler, meaning their membership included people with a range of different priorities. But over the last 12 years, party support has become more sorted by ideology or world view.

The result: elections feel much more existential, he said, and it becomes easier to fundamentally dislike the other side.

“It’s increasingly the case that, ‘People like me are in my political party and people not like me are in the other political party’,” said Trussler, director of data science for the university’s program on opinion research and election studies.

Political division is particularly stark in Wisconsin, an important battleground state that could prove crucial to deciding the November election.

A neighbour stopped by to talk to Herrick on recent warm afternoon. Pointing to the Kamala Harris sign in her yard, the neighbour laughed and said she could vote for those communists, referencing an often-used Trump attack about the vice-president. Unfazed by her neighbour’s remark, Herrick reflected on what was behind her decision in the election.

“Maybe my choice shouldn’t be made this way but … Trump as a person, I just don’t like him,” Herrick said.

Trump took Wisconsin in 2016 by less than a percentage point. President Joe Biden narrowly edged ahead in 2020, helping him take the White House.

The state has seen its political division play out in numerous ways beyond the presidential ticket. Until very recent changes, Wisconsin was considered one of the most gerrymandered states in the U.S., formerly with a “Swiss cheese” appearance to its electoral maps.

Its senators, conservative Republican Ron Johnson and liberal Democrat Tammy Baldwin, could not be further apart on nearly every core issue. It’s also where Scott Walker was the controversial Republican governor, bringing in a law that ended nearly all collective bargaining in the state until he was replaced by Democrat Tony Evers in 2019.

A large Trump flag waves in the wind outside Donna Hass’ house as the 65-year-old talked about crime and immigrants. Her county is considered one of most red in Wisconsin, and on social media she only uses Truth Social, a media platform owned by Trump.

“I have one son that doesn’t like to talk to me because he’s a lefty,” Hass said. “It’s horrible. You can’t even talk to your own kid and that’s just because of all the rhetoric.”

A recent Marquette Law School survey in Wisconsin found 46 per cent of people polled had stopped talking to someone about politics because of the presidential race.

Trump has exacerbated the division, said Allison Prasch, an associate professor at the University of Wisconsin-Madison. The former president’s powerful use of language galvanizes his base through fear, emotional appeals, and by tapping into anger and rage, she said.

“You see individuals responding very strongly in response to Trump,” the expert on U.S. presidential rhetoric said. “Whether that is moving toward a love and affiliation for him or being motivated by a deep hatred for him.”

Race, income and the rural-urban divide are some of the most important predictors of voting behaviour. Madison and Milwaukee, and some of their surrounding suburbs, lean Democrat while the rest of the state largely leans Republican.

College education is an important voting predictor. At Marquette University during a break from class, Chase Harris said sometimes it feels like “it’s Milwaukee versus the entire state.”

Sydney Tepley said people are too focused on the personal aspects of the candidates and it means there are not enough conversations about their policies and vision for the future of America.

“The long story short: the cost of living, inflation and taxes,” she said.

Tepley and Harris, nurses who are updating their training to become anesthetists, say it feels like the most pivotal election for their futures. But they are disheartened by what has taken place during the tumultuous campaign. Both intend to vote but are begrudgingly casting their ballot.

“I think I have an idea of where I lie,” Harris said. “But I will tell you for the first time ever I don’t want to vote for either of them.”

This report by The Canadian Press was first published Oct. 13, 2024.

— With files from The Associated Press

POINT LEAMINGTON, N.L. – A five-hour drive from St. John’s, N.L., and well off the beaten path, Point Leamington seems an unlikely spot for a one-of-a-kind tourist attraction.

But this is where the owner of an Ontario-based glove manufacturer has opened what is billed as the country’s first museum devoted entirely to gloves, hoping to draw visitors to the seaside Newfoundland community of about 575 people.

There are dainty gloves worn by Marilyn Monroe and Audrey Hepburn alongside a pair of worn-looking leather mitts that belonged to Elvis Presley. The mere sight of the hand coverings, a museum guide said, has been enough to prompt goosebumps and, in the case of the Elvis mitts, even requests to take a whiff.

“It’s just such a beautiful place,” Superior Glove president Tony Geng said of Point Leamington in a recent interview.

He said the town feels like a “second home.”

“Anything that we can do to keep it more alive and attract other people to it, I think is a cool thing.”

Inside the sunny, single-room museum, gloves sit upright in clear plastic cases, looking like they’re ready for a high-five. There’s a bright blue fishing glove with the tip of its pinky finger missing that belonged to David Suzuki, and a thick white glove with segmented fingers that was worn by astronaut Chris Hadfield as he somersaulted through space.

Presley’s mitts were part of his uniform in the late 1950s when he was in the U.S. army. Later, in Graceland, a “freak snowstorm” hit Memphis and he gave them to his private nurse’s daughter after he saw her playing in the snow in rubber dishwashing gloves, Geng said.

Marilyn Monroe’s tiny white gloves have a single pearl fastener on the wrist. Audrey Hepburn’s black leather Ralph Lauren gloves are longer, with three buttons gleaming in succession down the extended cuff.

They came from the collection of Sydney Guilaroff, the famed Hollywood hairstylist who created Vivien Leigh’s looks in “Gone With the Wind,” Tammy Fudge explained as she provided a tour last month.

The elegant gloves have been particularly popular with female visitors and plant workers, said Fudge, the research and development coordinator at the plant.

“There was one lady who had goosebumps,” she said. “But then again, you’ll have a few who will have goosebumps with Elvis Presley’s gloves as well.” Nobody has been permitted to smell Presley’s gloves, despite several requests.

Most of the items were bought through auctions or were given to Geng by his wife, who knows very well that he’s been fascinated by gloves his entire life. His late father, Frank Geng, bought the company in 1961, and Tony Geng began working there when he was just a boy.

Headquartered in Acton, Ont., Superior Glove specializes in industrial gloves and sleeves, built to protect workers from blades, fire and cold. They make a glove for SpaceX. At one point, the company furnished the Canadian Army with trigger mitts like the one worn by Presley, Geng said.

The glove museum is part of the sprawling Point Leamington factory, where machines spin, sew, stamp and sort as employees watch and calibrate. The plant produces more than 3,000 types of gloves and the yarn to make them — enough yarn in one day to go around the world one and a half times, Fudge said. Some machines spin threads of tungsten steel so thin they’re nearly impossible to see. The threads will be combined into yarn and knitted into cut-resistant gloves.

Point Leamington has a library, a post office, a few stores and not much else. Superior Glove began operations in the town hall in 1988, and it now employs nearly a quarter of the community’s population.

“We have husbands and wives, we have a mom and two sons, we have a husband and wife and son,” Fudge said of some of the plant’s employees.

Rural Newfoundland has a long history of young people moving away to mainland Canada for work. The Point Leamington plant is managed by one such person, Frazer Stuckless, who had worked at Superior Glove in Ontario. He planned to move home and start a taxi business, but Frank Geng asked Stuckless to help get a plant up and running in Point Leamington instead, Fudge said.

Since then, many more from the area have been able to return home and find a job at the factory, including Fudge.

The museum has attracted roughly 1,000 visitors since its grand opening in the spring of 2023, and Fudge led many of them on tours through the displays and the massive plant.

“Most people are surprised it’s even here,” she said. “Why wouldn’t we have a glove museum? We make gloves, and we make things that make gloves.”

This report by The Canadian Press was first published Oct. 13, 2024.