November 28th and December 7th were the release dates of Provincial and National economic data.  This blog post is a summary of that information.

National Update:

• Bank of Canada (BoC) decided to retain their overnight lending rate at 0.50%.
• Major Bank Prime lending rates remain at 2.70%.  TD Bank’s Prime rate is 2.85%
• Following the US election there has been a MAJOR pick up in bond yields reflecting anticipation of fiscal expansion in the US economy.  Canadian bond yields have followed suit.
• The Canada Child Benefit program and federal infrastructure spending are economically supportive but not yet evident in GDP.
• Business investment and non-energy goods exports continue to disappoint.

National Inflation Report Highlights:

• Total CPI has increased recently but is still below expectations due to lower food prices.
• Core inflation is at about 2%

Alberta Economic Highlights:

• GDP expected to increase in 2017 by 2.3% bolstered by higher oil prices, public sector infrastructure spending, Fort Mac rebuild, and a rebound in oil production.
• Nominal GDP, a broad measure of income, is expected to increase by 5.7% but remain below 2014 levels.
• External market risks have increased.  Global economic growth is underwhelming, Brexit and the outcome of the US election add to this.
• There remains uncertainty about the balance of the oil market.  Estimates are pushed back further into 2017, if at all.
• Oil rig activity is up over the past 5 months and spending on oil sands sustaining capital continues to support the industry into 2017.
• Business investment, outside O&G continues to sag.  Provincial and institutional spending are offsetting further decline.
• Employment is forecast to decline 1.7% in 2016.
• Employment recently picked up, however the number of people looking for work is also increasing.
• The current unemployment rate is 8.5%.
• Housing demand remains soft with signs of stability. Housing starts and existing home sales remain below pre-recession levels and have improved in recent months.

Look For:

Weaker than expected global economic growth.  If OPEC’s agreements, or lack thereof, do not happen expect a delayed AB recovery.  Also look for a slower than expected improvement in business activity that keeps employment and earnings low.  On the brighter side, higher than expected growth in the US or approval of more pipelines improve AB economic prospects.

Conclusion:

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For more specific Mortgage advice with your purchase, refinance or renewal, please contact me directly.

Cheers!

Chad Moore