TD Canada Trust provides a weekly economic highlight report that we choose to share with our clients and those who follow us. This is an easy place to stay current on the broader economic conditions in Canada and the U.S. so that you are better informed to make stronger decisions around your own real estate investments. We are always available to answer any questions or walk through your real estate investment goals for now or in the future.
- The Bank of Canada elected to leave its policy rate unchanged this week. In an accompanying speech, Deputy Governor Tim Lane set a high bar for easing, citing the resilient Canadian labour market. Data today suggests cracks may be appearing in that narrative as the labour market saw losses across the board.
- The Bank also remains concerned about the high levels of household debt. October’s credit data showed an increase in household debt, driven almost entirely by mortgages.
- Without persistent weakness in the labour market or a further escalation in trade conflicts, the Bank may still find it comfortable to remain on the sidelines for the time being.
- Trade tensions reemerged this week. President Trump suggested that the U.S.-China deal could wait until after the election, announced steel and aluminum tariffs on Brazil and Argentina, and threatened to impose tariffs on France. International trade numbers were also unambiguously weak in October, even as trade deficit had narrowed.
- Despite uncertainty on the trade front, it was another banner month for America’s job market. Payrolls rose by a healthy 266k in November, with service sector hiring accelerating for the fourth consecutive month.
- Contraction in the manufacturing sector deepened slightly in November, with the ISM manufacturing index edging lower to 48.1 from 48.3. Service industries continued to expand, alas at a slightly slower pace than in a month prior.