Category Canadian economy
The 2007Q4 GDP release: A cold December
This was a nasty surprise: Economic growth slowed considerably in the fourth quarter as real gross domestic product (GDP) grew 0.2%, down from 0.7% in the third quarter. Economic output contracted 0.7% in December. The driving factor here is the fall in exports: Exports recorded a significant 2.2% decline in the fourth quarter, in the […]
A current account imbalance finally unwinds
I’ve been unavoidably delayed in responding to a wave of recent events, so it’s catch-up time. The 2007Q4 current account went negative for the first time this century. Although imports and investment income payments held steady, the CAD appreciation led to declines in both the value of exports and in the value of investment income […]
More signs that Canada may yet be spared from the worst of a US recession
January’s Labour Force Survey release is (to me, anyway) an unexpected array of good news: December’s employment data were revised upwards from a loss of 18,700 jobs to one of 2,900 Employment increased by 46,400 in January The employment rate increased to 63.8%, yet another new record. Full-time employment went up; part-time employment went down […]
Should we be worrying about a ‘Carney put’?
Stackelberg Follower makes a point about the appointment of Mark Carney as Governor of the Bank of Canada that has been studiously avoided by commentators until now: I remain unconvinced that investment bankers should be running the central bank. Now, I don’t have a pathological hatred that most of them will likely earn more than […]
Canada’s housing sector is still holding up
One of the (many!) problems associated with living next to the US is the potential for confusing their problems with ours. The state of the housing market is a case in point. Here is a graph of US and Canadian housing starts: (I particularly like this graph because I was able to preserve the ‘rule […]
All quiet on the northern front
It’s an exciting time to be a macroeconomist in the US: sudden and large cuts in the federal funds rate, a fiscal stimulus plan, a current account deficit that may finally be unwinding: the whole nine yards. But almost none of that is spilling over here. The Bank of Canada did cut interest rates, yes, […]
Oh, and the Bank of Canada also cut interest rates
The Bank of Canada lowered its target for the overnight rate by 25 bps, to 4% today. This came as a surprise to pretty much no-one: core inflation is below the 2% target, and everyone can see the signs of a US slowdown. Either of those is a sufficient reason to lower interest rates. Although […]
How will the subprime crisis affect the Canadian economy?
I don’t really know, but that didn’t stop me from accepting an invitation from the local Radio-Canada station to do a radio interview on the subject (in French). You can listen to it here.
How manufacturing employment has fallen
We all know that increasing commodity prices and the resulting appreciation of the CAD has resulted in a reduction in employment in the manufacturing sector: The shift of productive resources out of the manufacturing sector is of course the appropriate response to the relative price movements we’ve seen over the past five years, and the […]
When will the Marshall-Lerner condition kick in?
The CAD appreciation hit a milestone in October, averaging above 1 USD for the first time in over thirty years. And the trade surplus went up. What’s going on? Here’s how the StatsCan release put it: In constant dollar terms, which isolates volume changes, volumes for imports rose 2.7% as prices declined 4.6%. Meanwhile, export […]
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