Anthony Viel’s Post

Today’s release of the monthly GDP shows that economic momentum picked up at the end of 2023. As a result, with the preliminary estimate for December suggesting activity rose 0.3% m-o-m, growth in the fourth quarter is estimated at 1.2% q-o-q ar. Moreover, even if economic activity were to be flat for the first three months of 2024, growth in the first quarter could reach 1.1% q-o-q ar. This would be much stronger than the Bank of Canada’s expectations 0.7% q-o-q ar. for Q4 and 0.2% q-o-q ar. for Q1 in the January Monetary Policy Report (released just last week). The big question is how sustainable the pick-up in economic activity seen in late 2023 will be and whether the momentum will continue in early 2024. The details offer some comfort, especially improved activity in manufacturing and natural resources extraction, while the preliminary estimate suggests an improvement in retail sales. In addition, the resolution of the teacher’s strike in Quebec, means that the drag from this sector should abate in January. Nevertheless, weakness in finance and insurance, and in real estate suggests that higher interest rates continue to be a drag on the economy. As we have written in the past (see https://bit.ly/3Tu8oKC), the full impact of the rise in interest rate is likely to be felt in early 2024, meaning that the current improved momentum in economic activity could prove temporary. As such, we should expect growth to weaken in the coming months. Whether the Canadian economy experiences a soft landing or a hard landing will depend on the labour market, given the amount of household debt (see (see https://bit.ly/4a9F7uG). November’s GDP number is unlikely to impact the Bank of Canada’s thinking, despite growth expected to be stronger than their expectations in Q4 and Q1. In our view, the attention is on the timing for a rate cut and we think the BoC is unlikely to contemplate rate cuts until inflation has been brought sustainably below 3%, something unlikely to happen until the Spring. However, continued resilience in the economy could delay the timing of a cut.

The latest GDP report reveals that Canada's economy is growing, albeit at a slower-than-expected pace. With the potential for the Bank of Canada to cut interest rates next week, there are promising opportunities on the horizon for both businesses and consumers. Stay tuned for updates as we navigate these changing economic times together! READ FULL STORY HERE: https://lnkd.in/euphc25a #CanadianEconomy #GDPGrowth #InterestRates #BankOfCanada #FinancialNews #EconomicUpdate #ConsumerSpending #InvestmentOpportunities #BusinessGrowth #StayInformed

The Canadian economy appeared to be slowing at the end of Q1, bolstering a case for the Bank of Canada to pivot to easier policy as early as June. Read more about the Q1 GDP forecast: #PionMatifat #FamilyOffice #WealthManagement #Investing #PrivateWealth #InvestmentManagement #RetirementPlanning

Canada’s Economy Is Tapping The Breaks 50% of Ontarians are not going out. 50-60% of Canadians are struggling. Canadians have a debt to income ratio of $1.83 for every dollar of disposable income. BNPL is likely behind a lot of retail holiday shopping. Inflation is 1.9% when you blackout mortgage costs and rental costs. They are not calling a recession now but we shouldn’t be surprised if that happens in 4th quarter. A slower holiday season versus 2022 and an even tougher Q1 is likely in 2024. I think interest rates will not go up this month and we will likely see them start to decline sooner in 2024. #Retail #Retailing #Economy #Strategy #Recession?

Soft landings are in view for the Canadian and U.S. economies, according to economic forecasts from the Bank of Nova Scotia and Bank of Montreal, though an exposed consumer makes Canada's descent from high inflation a bit bumpier.

Australia's economic growth slowed significantly in the March quarter, according to data released by the Australian Bureau of Statistics (ABS). While the overall GDP managed a meagre 0.1% increase, a deeper concern lies with the ongoing per capita recession – a measure that shows each person’s share of economic output. Katherine Keenan, ABS head of national accounts, said the weak March GDP figures were the economy’s lowest through-the-year growth since December 2020. Weak GDP would normally prompt the Reserve Bank of Australia to lower interest rates to stimulate the economy, however, sticky inflation is likely to delay that outcome. Canstar’s finance expert Steve Mickenbecker said borrowers would welcome an early 25-basis-point interest rate cut that could lower monthly repayments on the average $600,000 loan over 30 years by $101 to $3,984. https://lnkd.in/gaqMmnzX #GDP #percapitarecession #recession #mortgages #interestrates #inflation #AustralianBroker #brokernews

🚨New Article Alert🚨 Is Canada's economy heading toward a recession? Our latest piece looks into recent Statistics Canada data, revealing stagnant growth and raising important questions for policymakers. Find out what experts say could be next for the Bank of Canada's rate strategy. https://lnkd.in/gXdjmdBC #CanadianEconomy #BankOfCanada #RecessionWatch #FinancialMarkets #RateHikes #GDPData #EconomicTrends #MonetaryPolicy #StatisticsCanada #EconomicInsights

The Bank of Canada and the U.S. Federal Reserve both began raising interest rates in March, 2022. Both tightened monetary policy at the quickest pace in decades. In Canada, that’s pushed the economy to the edge of a recession. South of the border, the U.S. economy is defying gravity, reported The Globe and Mail. "The differences in economic performance have become increasingly stark in recent months. Canadian consumers are cutting back while Americans continue to splurge. U.S. businesses are investing in buildings and equipment, building up inventories and bringing on new workers, while Canadian companies are pulling back and bracing for a period of slow growth." "The picture is clearest when you look at gross domestic product. Canadian GDP contracted between April and June then stalled through the summer and early fall. In the United States, GDP grew at an annualized rate of 2.1 per cent in the second quarter and accelerated to a whopping 4.9 per cent in the third quarter." "What explains these divergent paths? Inflation has followed a similar trajectory in both countries, surging to four-decade highs in the summer of 2022, then declining to between 3 per cent and 4 per cent in recent months. Interest rates have moved up sharply in both; the policy rate is actually a half-point higher in the U.S. than in Canada." https://lnkd.in/d4GRRUCm #canada #economy #interestrates

Big economic news ahead of next week’s Bank of Canada rate decision. The Canadian economy unexpectedly contracted in the second quarter declining at an annualized rate of 0.2% which is lower than the Bank of Canada had anticipated. This was largely due to declines in housing investments, household spending and slower international exports : https://lnkd.in/gEAEBbSH #CIBC #SmartAdvice #economy #Canada #BOC #ratedecision #housinginvestments #householdspending

Is the Canadian Economy Cooling Down? Key Q2-2023 Stats Raise Interest Rate Questions The Canadian economy faced unexpected challenges in Q2-2023, contracting by an annualized 0.2%, significantly lower than the Bank of Canada's 1.5% growth prediction. This slowdown is influencing the interest rate landscape and potentially offering some relief for borrowers. Read more here: https://lnkd.in/gGTqZHJr #EconomicUpdate #InterestRates