The Canadian economy gained 41,000 jobs in April, according to Statistics Canada, more than double the number anticipated in a recent Bloomberg survey..Respondents to the survey expected an increase of 20,000 jobs last month, the eighth month in a row the labour market has seen increases..That number may be raising eyebrows at the Bank of Canada, says Fergal McAllinden in Canadian Mortgage Professional (CMP)..“Overall inflation continues to trend in the right direction in the Bank of Canada’s eyes, but could a resilient labour market be giving the central bank cause for concern?” says McAllinden, adding news about the labour market growth comes at a time when the bank is in deliberations about keeping its overnight rate where it is, or possibly hiking it..“In its last announcement on interest rates, the bank highlighted the risk that elevated wage growth keeps inflation expectations higher for longer, with service price inflation and corporate pricing behaviour also posing a threat to its plans to return annual price growth back to the 2% target,” says McAllinden..“The central bank has indicated it’s prepared to leave rates untouched if economic trends play out as expected for the rest of the year, but an unexpectedly healthy jobs outlook for the coming months may complicate its approach.”.In its last announcement, the bank also said it remained prepared to move its rate upwards from its current 4.5%..StatCan reported inflation rose 4.3% year over year in March, following a 5.2% increase in February, the smallest increase since August 2021, however excluding food and energy, prices were up 4.5% year-over-year in March, following a 4.8% gain in February, while the all-items CPI excluding mortgage interest cost rose 3.6%, after increasing 4.7% in February..Impact on housing and mortgage markets.Canadians paid more in mortgage interest costs, year-over-year, said StatCan, due to the bank’s aggressive series of rate hikes, while holding the rate at 4.5% at its last two announcements has had big implications for Canada’s housing markets, says Sadiq Boodoo, president of Approved Financial..Boodoo told CMP the bank’s decisions for the rest of the year will have enormous significance..Canadian home buyers moved to the sidelines, waiting to see how high rates would climb and holding the rate, especially in March, was “what everybody was waiting for.” .“With low inventory, the timeframe from pre-approval to purchasing can be lengthy, where [buyers] may have to get preapproved a couple of times, because the first pre-approval expired or whatever,” said Boodoo. “And if rates are going up, their buying power might shift.”.“Today they [might] qualify for a $750,000 purchase and (if) their pre-approval expires, (and) they haven’t found anything (to buy), they go back to get preapproved again and rates have changed and now they’re down to $700,000 or $680,000.”.For those buyers, finding a suitable home was already difficult at their higher pre-approval limit, Boodoo said..“Meaning that many decided to wait until the dust settles and see where the bank’s policy rate would land before re-entering the market.”.In terms of which way inflation is headed, some market observers in recent weeks suggested the annual inflation rate is closer to the bank’s target of 2% than the numbers indicate..Speaking on a virtual panel discussion, CIBC deputy chief economist Benjamin Tal said a significant improvement in international supply chain logistics has slowed the rate of inflation. .“The supply chain index by the New York Fed is basically back to normal. Shipping costs are down dramatically, and shipping activity is back to normal today in the US,” Tal said. “You have 20% more truck drivers than before the crisis, so this is going down.”.It’s important, said Tal, because improved supply chains will lower the cost of goods coming into Canada, helping to reduce inflation quicker..“Housings costs are part of the inflation [rate], and obviously higher mortgage rates feed into higher housing costs,” said Boodoo. “If we back that out, we’re at about 3%. So, we’re only up 1% higher than the government’s target and we still haven’t seen the full effect of all their rate increases yet because it takes eight to 12 months for [that] to take place..“So, I think we may end up seeing a situation where the government overshot the rate increases and our true inflation adjusted for those rate increases comes down even below the 2% mark.”.This is what the Western Standard is up againstThe Trudeau government is funding lies and propaganda by directly subsidizing the mainstream media. They do this to entrench the powerful Eastern, woke and corrupt interests that dominate the political, social and economic institutions in Canada. Federal authorities are constantly trying to censor us and stop us from publishing the stories that they don’t want you to read. Ottawa may weaponize our taxes and police against us, but we’ve got a powerful ally on our side.You. Free men, and free women. We need you to stand with us and become a member of the Western Standard. Here’s what you will get for your membership:Unlimited access to all articles from the Western Standard, Alberta Report, West Coast Standard, and Saskatchewan Standard, with no paywall. Our daily newsletter delivered to your inbox. .Access to exclusive Member-only WS events.Keep the West’s leading independent media voice strong and free.If you can, please support us with a monthly or annual membership. It takes just a moment to set up, and you will be making a big impact on keeping one the last independent media outlets in Canada free from Ottawa’s corrupting influence.
The Canadian economy gained 41,000 jobs in April, according to Statistics Canada, more than double the number anticipated in a recent Bloomberg survey..Respondents to the survey expected an increase of 20,000 jobs last month, the eighth month in a row the labour market has seen increases..That number may be raising eyebrows at the Bank of Canada, says Fergal McAllinden in Canadian Mortgage Professional (CMP)..“Overall inflation continues to trend in the right direction in the Bank of Canada’s eyes, but could a resilient labour market be giving the central bank cause for concern?” says McAllinden, adding news about the labour market growth comes at a time when the bank is in deliberations about keeping its overnight rate where it is, or possibly hiking it..“In its last announcement on interest rates, the bank highlighted the risk that elevated wage growth keeps inflation expectations higher for longer, with service price inflation and corporate pricing behaviour also posing a threat to its plans to return annual price growth back to the 2% target,” says McAllinden..“The central bank has indicated it’s prepared to leave rates untouched if economic trends play out as expected for the rest of the year, but an unexpectedly healthy jobs outlook for the coming months may complicate its approach.”.In its last announcement, the bank also said it remained prepared to move its rate upwards from its current 4.5%..StatCan reported inflation rose 4.3% year over year in March, following a 5.2% increase in February, the smallest increase since August 2021, however excluding food and energy, prices were up 4.5% year-over-year in March, following a 4.8% gain in February, while the all-items CPI excluding mortgage interest cost rose 3.6%, after increasing 4.7% in February..Impact on housing and mortgage markets.Canadians paid more in mortgage interest costs, year-over-year, said StatCan, due to the bank’s aggressive series of rate hikes, while holding the rate at 4.5% at its last two announcements has had big implications for Canada’s housing markets, says Sadiq Boodoo, president of Approved Financial..Boodoo told CMP the bank’s decisions for the rest of the year will have enormous significance..Canadian home buyers moved to the sidelines, waiting to see how high rates would climb and holding the rate, especially in March, was “what everybody was waiting for.” .“With low inventory, the timeframe from pre-approval to purchasing can be lengthy, where [buyers] may have to get preapproved a couple of times, because the first pre-approval expired or whatever,” said Boodoo. “And if rates are going up, their buying power might shift.”.“Today they [might] qualify for a $750,000 purchase and (if) their pre-approval expires, (and) they haven’t found anything (to buy), they go back to get preapproved again and rates have changed and now they’re down to $700,000 or $680,000.”.For those buyers, finding a suitable home was already difficult at their higher pre-approval limit, Boodoo said..“Meaning that many decided to wait until the dust settles and see where the bank’s policy rate would land before re-entering the market.”.In terms of which way inflation is headed, some market observers in recent weeks suggested the annual inflation rate is closer to the bank’s target of 2% than the numbers indicate..Speaking on a virtual panel discussion, CIBC deputy chief economist Benjamin Tal said a significant improvement in international supply chain logistics has slowed the rate of inflation. .“The supply chain index by the New York Fed is basically back to normal. Shipping costs are down dramatically, and shipping activity is back to normal today in the US,” Tal said. “You have 20% more truck drivers than before the crisis, so this is going down.”.It’s important, said Tal, because improved supply chains will lower the cost of goods coming into Canada, helping to reduce inflation quicker..“Housings costs are part of the inflation [rate], and obviously higher mortgage rates feed into higher housing costs,” said Boodoo. “If we back that out, we’re at about 3%. So, we’re only up 1% higher than the government’s target and we still haven’t seen the full effect of all their rate increases yet because it takes eight to 12 months for [that] to take place..“So, I think we may end up seeing a situation where the government overshot the rate increases and our true inflation adjusted for those rate increases comes down even below the 2% mark.”.This is what the Western Standard is up againstThe Trudeau government is funding lies and propaganda by directly subsidizing the mainstream media. They do this to entrench the powerful Eastern, woke and corrupt interests that dominate the political, social and economic institutions in Canada. Federal authorities are constantly trying to censor us and stop us from publishing the stories that they don’t want you to read. Ottawa may weaponize our taxes and police against us, but we’ve got a powerful ally on our side.You. Free men, and free women. We need you to stand with us and become a member of the Western Standard. Here’s what you will get for your membership:Unlimited access to all articles from the Western Standard, Alberta Report, West Coast Standard, and Saskatchewan Standard, with no paywall. Our daily newsletter delivered to your inbox. .Access to exclusive Member-only WS events.Keep the West’s leading independent media voice strong and free.If you can, please support us with a monthly or annual membership. It takes just a moment to set up, and you will be making a big impact on keeping one the last independent media outlets in Canada free from Ottawa’s corrupting influence.
