Hey Everyone,
Here are some of the important highlights from today’s Bank of Canada (BoC) interest rate announcement. I’ve also included a current Alberta economic update for higher connection and relevance for you:
Click here to read the full BoC announcement. Click here for the full AB economic update.
National Economic Comment Summary:
- Growth of Canadian exports is relatively strong compared with the first half of 2016. Our second half export strength does not make up for the slower first half slack.
- Exports have a lower trajectory for growth than previously thought.
- Slower export growth is due to decreasing global demand, increasing US consumption of non-Canadian goods, and increases to global competitiveness.
- Economy continues to adjust to the oil price shock with investment in the oil sector seemingly bottomed out.
- Household spending up, unemployment down (outside of oil intensive geographic areas).
National Real Estate Comment Summary:
- Expect slower re-sale activity.
- New Mortgage rules expected to restrain Real Estate investment, promote stability in housing and dampen household vulnerabilities.
National GDP/Inflation Comment Summary:
- Gross Domestic Product expected to be 1.1% in 2016 and ~2% in 2017/18.
- Core inflation remains at 2% because of past exchange rate depreciation and excess capacity are offsetting.
- Consumer Price Index (CPI) down because of low gas, food and telecom prices.
- Expect CPI to be ~2% in 2017 with low pressure on inflation while economic slack persists.
Alberta Economic Update:
- AB Gross Domestic Product (GDP) down 4%
- AB population 4.25M growth of 1.75% year over year. Canada’s population growth 1.2%.
- AB interprovincial migrants leaving AB ~2,100
- Employment down 2% y-o-y.
- AB unemployment rate is 8.5%. Canada’s unemployment rate is 7%.
- Oil rig utilization down 29% y-o-y. Rest of Canada oil rig utilization down 30%.
- AB CPI rose 0.7%. Excluding food and energy AB CPI rose 1.4%.
- Gasoline prices down 15% y-o-y.
- Housing starts down 22% y-o-y.
If not already, the worst might be very close or close behind us. I find hope in this thought.
Talk soon,
C. Moore
P.S
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