Weekly Economic Watch - BNC · crashed in March as supply lines froze and international demand collapsed. ... Industrial production dove 5.4% in March, marking the worst monthly drop

Economics and Strategy

Weekly Economic Watch

May 8, 2020

By Jocelyn Paquet et al.

Table of Contents What we’ll be watching ................................... P. 6 Calendar of upcoming releases ..................... P. 7 Weekly data update ........................................ P. 8

Week in review CANADA: Employment fell by 2 million in April (1,993,800 to be exact) according to the Labour Force Survey. That pushed the unemployment rate up 5.2 percentage points to 13.0%, by far the biggest one-month jump since at least 1976. The participation rate fell 3.7 percentage points to 59.8%. Job cuts were driven by the private sector (-1,874K), although there were also sharp declines in the public sector (-76K) and in self-employment (-43K). Payrolls in the goods sector fell 621K with losses in most categories including manufacturing (-267K) and construction (-314K). Services-producing industries, meanwhile, saw employment drop by 1,373K courtesy of declines in all categories including trade (-375K) and accommodation/food services (-321K). Full-time employment dropped 1,472K while the ranks of part-timers shrank 522K. The jobs purge, not surprisingly, caused hours worked to sink 14.9% m/m. All provinces saw jobs losses with Ontario (-689K), Quebec (-557K), British Columbia (-264K) and Alberta (-244K) leading the pack.

The Labour Force Survey was conducted when containment measures were in full swing in Canada. Combining losses in March and April, we get a cumulative drop of 3 million jobs over two months due the closure of non-essential services. This represents a staggering 16% decrease of the workforce. The jobless rate reached its highest level since December 1982 but this gives only a partial picture of the hemorrhage as the participation rate

dropped significantly over the past two months. While the definition of the unemployment rate has changed over time, the employment to population ratio has not, allowing us to get a longer historical perspective. It turns out that the employment rate in April was at its lowest since the 1960s, a time when women were a lot less present in the workforce. Otherwise, there is reason to believe that the magnitude of job losses understates the economic shock. While some individuals lost their jobs, other employees saw their hours worked being reduced significantly. In fact, hours worked have decreased by a massive 28% since February. Economic activity should rebound in May as social distancing measures are gradually lifted across the country but slack in the labour market is likely here to stay. To be sure, we remain concerned by the fact that more than a fifth of total pre-crisis employment in the country was in industries that are likely to continue to suffer long after lockdowns are lifted (see chart below).

Housing starts fell 24.2K in April to 171.3K in seasonally adjusted and annualized terms. This was a lot better than the 105.0K expected by consensus. Urban starts fell from 181.8K to a 14-month low of 159.1K given a 20.5K decrease in the single-family segment (to 38.3K, the second worst in data going back to 1990). Multifamily starts in urban areas barely budged, cooling just 2.2K to 120.8K. Rural starts, for their part, edged down 1.5K to 12.1K. At the provincial urban level, there were only 4.9K starts recorded in Quebec (down from 45.2K the prior month) but the collapse was partially offset by a 26.8K gain in Ontario (to 94.8K, one of the highest results registered in the past 10 years). Elsewhere starts fell 4.9K in B.C. and 5.7K in the Prairies. The value of residential building permits issued declined 13.3% in March to C$4.6 billion.

Starts dropped a lot less than expected in April and that despite a complete halt in residential construction in Quebec, the latter caused by the imposition of stringent social distancing rules. Starts in Ontario, meanwhile, soared, a phenomenon that is difficult to explain considering the province authorized only existing projects to keep going in April. Maybe homebuilders

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NBF Economics and Strategy (data via Statistics Canada)

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rushed to get construction started before lockdown measures were introduced on April 3. In any case, the increase in Ontario was an anomaly that is unlikely to reflect the true state of affairs in the construction sector. Elsewhere in Canada, construction was allowed to continue but apparently cooled anyway with starts outside of Quebec and Ontario falling from 82.2K to 71.6K. Looking ahead, starts in Quebec may recover slightly in May, thanks to a gradual re-opening of the economy. However, the improvement should be more than offset by an expected retrenchment in Ontario (after April’s unsustainable gain). So, starts are unlikely to improve much in May. In fact, they could very well decline some more. We’ll probably have to wait until June before we get a clearer picture of the post-lockdown situation in the residential construction industry. To save you the suspense, we don’t expect starts to come back to their pre-crisis level in the current context. A sharp reduction in immigration, coupled with unprecedented job losses, should put a serious dent in demand for housing. Homebuilders will have to adjust to the new reality.

The merchandise trade deficit widened less than expected in March, coming in at C$1.41 billion from a revised C$0.89 billion (initially estimated at C$0.98 billion). Nominal exports sank 4.7%, while nominal imports fell 3.5%. On the export side, 7 of the 11 categories saw decreases, notably energy products (-7.4%), motor vehicles/parts (-14.4%, the worst monthly contraction since January 2014) and aircraft/other transportation equipment (-24.8%, albeit after a strong showing in February). Where imports are concerned, a small gain in the consumer goods segment (+1.8%) was more than offset by sizeable declines for energy products (-5.2%) and motor vehicles/parts (-13.1%, the steepest contraction since 2009). In real terms, exports decreased 4.8% in March, while imports retraced 5.8%.

Although the worst is surely yet to come, the early impact of COVID-19 was already clearly visible in March’s merchandise trade report. Both nominal exports and nominal imports recorded steep monthly declines despite the sharpest devaluation of the Canadian dollar against the U.S. dollar since January 2015. Exports totaled just C$46.3 billion in March (-8.8% y/y), their lowest level since January 2018. Imports, meanwhile, dropped to a 29-month low of C$47.7 billion (-9.9% y/y). As could be expected in

light of the pullback in commodity prices, total trade (exports + imports) in energy products collapsed 6.8% m/m. Trade also fell sharply in the motor vehicles and parts category as several North American automakers began to cease production. With exports/imports in the energy and motor vehicles sectors in full retreat, it was not surprising to see total trade with the United States fall 5.0% in the month, that is, the most since March 2016. Regarding quarterly data, trade in goods does not appear to have contributed much to Q1 growth as real exports (-9.4% annualized) shrank almost as fast as real imports did (-11.0% annualized, the most since 2009). A steep contraction in import volumes in the categories of machinery equipment (-16.5% annualized) and consumer goods (-16.4% annualized, the steepest since 2008) does not bode well for investment spending and household consumption in the first quarter of 2020.

In a webcast to the C.D. Howe Institute, Bank of Canada Senior Deputy Governor Carolyn Wilkins discussed the Bank’s response to the COVID-19 pandemic and how they were providing a “bridge to recovery”. While giving a nod to fiscal policy, she highlighted the two main types of policy action the Bank of Canada had taken. First, 150 basis points of cumulative interest rate relief were supposed to “lay the foundation for when the recovery gets underway”. Second, the BoC implemented a host of asset purchase programs to “restore the functioning of core short-term funding markets” via term repos, the Standing Term Liquidity Facility, increased treasury bill auction take-up, and the purchase of provincial money market securities, banker’s acceptances and commercial paper. She also highlighted the Bank’s support for the Canadian bond markets (Government of Canada, provincial and corporate).

Wilkins recognized that these purchases had led to a spectacular rise in the BoC’s balance sheet from C$120 billion in early March to C$365 billion last week. However, she assured that inflation-control objectives would continue to guide the BoC’s actions and that runaway inflation was not a major concern because for three reasons: (1) the run-off of assets naturally removed monetary stimulus (90% of balance sheet assets mature within a year); (2) liquidity could be drained also by reverse repos and selling assets; and (3) the overnight rate could be raised. She also underscores

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Canada: Goods exchanges at their lowest since January 2018 Total trade (nominal imports + nominal imports)


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the distinction between the stimulus/liquidity being provided and helicopter money (i.e., a permanent money supply increase). Wilkins acknowledged the risk of deflation and the problems it would pose but noted that the banking sector was in a much better position now than during the deflationary shock after the Great Depression and that the policy mistakes of that era would not be repeated. As for the economic outlook, Wilkins pointed out that larger debt loads and low energy prices were potential headwinds to the Canadian economy going forward.

UNITED STATES: The establishment survey showed non-farm payrolls shrinking 20.5 million in April as all major industries registered declines courtesy of coronavirus lockdowns. The private sector cut 19.5 million jobs with goods sector payrolls down 2.4 million (including -1.3 million in manufacturing) and services sector payrolls sinking 17.1 million (including -7.7 million in leisure/hospitality). Government cut payrolls by nearly 1 million. All those numbers are new records, and not in a good way. Average hourly earnings jumped to 7.9% on a year-on-year basis, although that’s completely meaningless in the context of millions of low-paid jobs disappearing. So, in the blink of an eye, all the jobs created in the U.S. since 2011 were wiped out. The household survey was even gloomier, showing total employment sinking 22.4 million in April and returning to levels last seen in 1999. That caused a 10.3 percentage point increase in the unemployment rate (the largest one-month increase ever recorded), the latter reaching 14.7% or the highest since 1940. Worse, the unemployment rate is not giving the full picture of the damage caused by this pandemic. Only a portion of those laid off are looking for work (i.e. considered unemployed), the remaining either delaying search until the economy reopens or waiting to be called back to their old jobs. This is reflected in April’s record 6.6 million increase in the number of Americans considered “not in the labour force”. This explains the slumping participation rate to just 60.2% (lowest since 1972), without which the jobless rate would have surged even more. Millions of lost jobs in the last couple of months will come back later this year as lockdowns are eased and economic growth returns, but the recovery won’t be complete considering the likelihood of permanent capacity destruction.

The ISM Non-Manufacturing Index plunged from 52.5 in March to an 11-year low of 41.8 in April. This was still above the lows reached

at the height of the Great Recession (37.8) but the monthly drop (-10.7 points) was the largest recorded since the index’s inception in 1997. It was also the first deterioration in operating conditions reported in the services sector in 123 months. The details of the report were pretty grim with three sub-indices falling to new all-time lows: business activity (26.0 vs. 48.0 the prior month), new orders (32.9 vs. 52.9), and employment (30.0 vs. 47.0). These declines were partially offset by a steep rise in the sub-index tracking supplier delivery times, which sprand from 62.1 to a record high of 76.0. An increase in this sub-index generally reflects strong demand and, therefore, contributes positively to the headline PMI. However, as this increase probably stemmed from disruptions associated with the coronavirus outbreak and business closures, it was not a sign of vigour. Without this component, the headline manufacturing index would have plummetted 19.7 points instead of only 10.7. Only two of the 18 industries surveyed reported growth in April: public administration and finance/insurance.

Initial jobless claims totaled 3,169K in the week ended May 2, down some from the unprecedented levels observed in the previous five weeks (6,867K, 6,615K, 5,237K, 4,442K, and 3,846K, respectively) but still extraordinarily high by historical standards. The 33.5 million people who applied for unemployment benefits in the past seven weeks represent a staggering 20.6% of the pre-crisis labour force.

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Jobless rate does not give full picture of damage caused by pandemicLabour force participation

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As record numbers of workers moved out of the

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United States: Services sector shrank at fastest pace since 2009 in AprilISM Non-Manufacturing Index. Last observation: April 2020

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The April Senior Loan Officer Opinion Survey showed that U.S. financial institutions tightened their standards significantly on commercial and industrial loans to firms of all sizes over the past three months and that they did so despite slightly stronger demand for these loans. Banks also reported a sharp tightening across all commercial real estate loan categories. The same was true regarding loans to consumers, including credit card loans, auto loans, and other consumer loans. Meanwhile, a “moderate fraction” of banks tightened their lending standards on most categories of residential real estate loans. The overall tightening of loan conditions in Q1 was quite steep but still less widespread than at the top of the 2008-09 crisis. It is worth mentioning, though, that the survey’s cut-off date was April 3, that is, just before the peak of containment measures in the country. Given that the crisis intensified in April, we can expect a further tightening of loan standards in Q2.

In March, the trade deficit widened from a 41-month low of $39.8 billion to $44.4 billion. The increase was due in part to the biggest drop in goods exports since 2008 (-6.7% to $128.1 billion), led by crude oil (-$1.0 billion), auto parts (-$0.9 billion), and passenger cars (-$0.8 billion). Regarding these last two segments, lower exports reflected shutdowns at some auto plants. Goods imports, for their part, flagged 2.3% to $193.7 billion on declines for cell phones (-$2.5 billion) and computers (-$0.8 billion), both of which tend to be sourced in Asia, the first region to be hit by the coronavirus epidemic. Imports of automotive parts were down $1.5 billion (for the same reason mentioned above). With exports retreating at a faster pace than imports, the goods trade deficit swelled $4.6 billion to $65.6 billion. The services surplus, meanwhile, stayed roughly unchanged at $21.2 billion despite historic slumps for both exports (-15.3%) and imports (-21.8%). The decline in total services exchanged was attributable to the collapse of tourism caused by the extensive movement travel restrictions imposed to limit the spread of COVID-19. Specifically, travel exports crumbled 45% from February to March, while imports cratered 64%.

On a country-by-country basis, the U.S. goods deficit widened with Canada (from $1.6 billion to $2.6 billion) and Germany (from $4.8 billion to $6.0 billion). On the other hand, the merchandise deficit with China fell from $19.7 billion to $15.5 billion, its lowest level since 2009. The smaller deficit with the Middle Kingdom reflected yet another sizeable drop in imports from that country (-14.2% m/m, -36.5% y/y). Here, too, the coronavirus outbreak was likely to blame, as Chinese imports to the United States were curtailed by severe containment measures, factory closures and supply chain disruptions.

On a quarterly basis, total exports edged up 1.1% in real annualized terms in Q1 while imports tumbled 14.8%. This explains the strong contribution to Q1 GDP growth from international trade.

WORLD: The JPMorgan Global Manufacturing PMI slid from 47.3 in March to 39.8 in April, indicating the steepest contraction in factory activity since March 2009. The pace of decline would have been even more acute had it not been for the stabilization of the situation in China (PMI at 49.4). Outside of the Middle Kingdom, the downturn deepened. At the global level, both output and new orders fell the most since the Great Recession.

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United States: Banks tightened loan standards sharply in Q1Fed’s Senior Loan Officer Survey. Net percentage of domestic banks tightening standards on…

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U.S.: COVID-19 hit exchanges of goods and services hard in March

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United States: Trade deficit with China at its lowest on record

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New orders suffered from a dry-up in international demand; new export orders registered their worst contraction ever. As the overall picture continued to worsen and with business confidence at an all-time low according to Markit, factories worldwide reduced headcounts for the fifth month running and the most in 11 years. Every country included in the headline index experienced a contraction in factory activity during the month, but the worst downturns occurred in India, Spain, Italy, Russia, France, and the UK.

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What we’ll be watching next weekIN THE U.S., the release of March’s CPI data will be watched closely. While an economic downturn usually translates into weak core inflation, it could be a bit different this time around as supply issues are also at play. For that reason, we expect the core price index to have remained flat in April (the street is calling for a decline). This would still be consistent with a two-tick decline of the annual rate to 1.9%. The massive plunge in gasoline prices, meanwhile, should have led to a 0.7% monthly decline of the headline CPI in April, a scenario that would cause the 12-month rate to drop from 1.5% to 0.5%. The full effects of the coronavirus will be visible in a host of other indicators for April due to be released this week. Industrial production might have shrunken a staggering 11.5% while retail sales very likely registered their worst monthly decline on record (-12.0%). On the Fed talk trail, the President of the Federal Reserve Bank of Philadelphia Patrick Harker will discuss the impact to Covid-19 on Tuesday. Also on Tuesday, the President of the Federal Reserve Bank of St Louis James Bullard will speak on the economic outlook.

IN CANADA, manufacturing sales could have decreased 2.5% in March judging from previously-reported data on factory goods exports. This week will also provide an update on the state of the housing market in April with the release of CREA’s existing home sales. We expect sales to have retreated at an unprecedented pace in the month. On Thursday, the Bank of Canada will release the spring edition of its bi-yearly Financial System Survey. It will be followed on Friday by the publication of Bank’s latest Senior Loan Officer Survey.

ELSEWHERE IN THE WORLD, we’ll get Marchs data on industrial production and the trade balance in the eurozone. Several April indicators will also be available in China, notably industrial production, retail sales and the consumer price index.

Previous NBF forecasts

CPI (April, y/y chg.) 1.5% 0.5%Core CPI (April, y/y chg.) 2.1% 1.9%

Industrial production (April, m/m chg.) -5.4% -11.5%

Retail sales (April, m/m chg.) -8.4% -12.0%Ex-autos retail sales (April, m/m chg.) -4.2% -8.5%

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United States: Headline inflation likely dropped sharply in AprilConsumer price index

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Economic Calendar – Canada & U.S

Level 1 week 1 month 3 months YTD 1 year 5 years (ann.)CanadaS&P/TSX Composite 14833.7 0.4% 9.2% -15.2% -12.0% -6.3% 2.8% 17944.1 (20 Feb 2020) 11092.5 (5 Jul 2010)

U.S.S&P 500 Composite 2881.2 -0.1% / -1.0% 8.6% / 8.5% -8.3% / -13.0% -2.9% / -10.2% 6.1% / 2.0% 12.0% / 8.9% 3386.2 (19 Feb 2020) 1022.6 (2 Jul 2010)Dow Jones Industrials 23875.9 -0.9% / -1.9% 5.7% / 5.6% -13.0% / -17.4% -8.8% / -15.7% -1.8% / -5.7% 11.7% / 8.5% 29551.4 (12 Feb 2020) 9686.5 (2 Jul 2010)Nasdaq Composite 8979.7 2.0% / 1.0% 14.0% / 13.9% -0.3% / -5.5% 8.6% / 0.4% 18.6% / 14.0% 17.3% / 13.9% 9817.2 (19 Feb 2020) 2091.8 (2 Jul 2010)

WorldEuro Stoxx 50 2880.6 -1.8% / -1.2% 0.6% / 1.5% -20.7% / -23.5% -19.2% / -22.2% -12.3% / -12.5% 1.3% / -0.7% 3865.2 (19 Feb 2020) 1995.0 (12 Sep 2011)FTSE100 5936.0 -1.0% / 0.7% 4.3% / 4.4% -19.5% / -19.5% -20.1% / -20.3% -16.5% / -14.8% -0.3% / 1.1% 7877.5 (22 May 2018) 4805.8 (1 Jul 2010)TOPIX 1426.7 -1.3% / -2.6% 4.1% / 1.7% -9.4% / -16.6% -7.4% / -16.1% -1.3% / -8.5% 5.6% / 0.3% 1911.1 (23 Jan 2018) 695.5 (4 Jun 2012)CSI 300 3924.9 0.7% / 0.3% 2.9% / 3.4% 4.5% / 0.7% 1.8% / -4.2% 7.0% / 7.8% -0.4% / -0.6% 5353.8 (8 Jun 2015) 2087.0 (20 Mar 2014)MSCI World 481.8 -0.5% / -1.4% 6.6% / 6.6% -10.8% / -15.4% -7.0% / -14.0% 0.0% / -4.0% 7.8% / 4.8% 581.0 (12 Feb 2020) 266.4 (5 Jul 2010)MSCI Emerg. Markets 896.9 -2.1% / -3.0% 2.4% / 2.3% -12.9% / -17.4% -12.5% / -19.1% -9.0% / -12.6% 3.0% / 0.1% 1273.1 (26 Jan 2018) 688.5 (21 Jan 2016)MSCI EAFE 1617.9 -1.3% / -2.3% 3.1% / 3.0% -15.0% / -19.3% -13.0% / -19.5% -7.8% / -11.4% 3.0% / 0.1% 2186.6 (25 Jan 2018) 1305.1 (25 May 2010)

1 week 1 month YTD 1 year 5 years (ann.)FTSE IndicesOverall Universe 0.1% 4.2% 5.5% 8.3% 3.9%Long Term Universe 0.0% 7.7% 7.2% 13.1% 6.2%Mid Term Universe 0.1% 3.8% 6.9% 8.7% 3.9%Short Term Universe 0.2% 1.5% 3.4% 4.5% 2.1%Federal Universe 0.1% 1.8% 6.8% 8.1% 3.1%Provincial Universe -0.1% 5.8% 6.5% 10.3% 4.8%Municipal Universe -0.2% 4.9% 5.6% 9.4% 4.6%Corporate Universe 0.4% 5.1% 2.5% 5.9% 3.9%

3 mths 1 year 5 years 10 years 30 yearsCanada 0.27% 0.38% 0.37% 0.55% 1.13%

1 week chg (bps) +1 +4 -1 +0 +01 month chg (bps) +6 -5 -30 -27 -211 year chg (bps) -141 -133 -118 -114 -81

U.S. 0.11% 0.14% 0.29% 0.63% 1.32%1 week chg (bps) 0 -3 -5 +1 +51 month chg (bps) -4 -6 -19 -10 -11 year chg (bps) -233 -223 -196 -182 -154

latest 1 week ago 1 month ago January 1st 1 year agoUSDCAD 1.403 1.389 1.401 1.297 1.347

US cents per cad 0.713 0.720 0.714 0.771 0.742

EURCAD 1.512 1.521 1.525 1.456 1.507EURUSD 1.078 1.095 1.088 1.123 1.119USDJPY 106.6 106.9 109.0 108.7 110.4GBPUSD 1.229 1.261 1.231 1.325 1.305USDCNY 7.092 7.052 7.055 6.966 6.760

latest 1 week ago 1 month ago January 1st 1 year agoOil - WTI ($/barrel) 23.55 18.84 23.63 61.06 61.40Oil - Brent ($/barrel) 21.97 14.83 19.81 68.97 70.88Gold ($/oz) 1698.76 1704.81 1651.11 1520.50 1283.83CRB Metals (index) 655.2 629.6 651.8 752.1 846.1

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Latest 12 months ago Latest 12-month avgCanada 13.0% 5.7% -1993.8K -238.1K

Ontario 11.3% 5.9% -689.2K -79.9KQuebec 17.0% 4.9% -556.5K -64.9KBritish Columbia 11.5% 4.6% -264.1K -35.1KAlberta 13.4% 6.7% -243.8K -31.8K

United States 14.7% 3.6% -20500.0K -1618.3KEurozone 7.4% 7.7% --- ---Japan 2.5% 2.5% -110.0K 7.5K

Y/Y Y/Y Y/YLatest 3-mth ann. 6 months ago 1 year ago

CanadaHeadline CPI 0.9% -2.9% 1.9% 1.9%Average core 1.8% --- 2.0% 2.0%

United StatesHeadline PCE 1.3% -0.1% 1.3% 1.4%Core PCE 1.7% 1.0% 1.7% 1.5%

EurozoneHeadline CPI 0.4% --- 0.7% 1.7%Core CPI 0.9% --- 1.1% 1.3%

JapanHeadline CPI 0.4% -0.4% 0.2% 0.5%Core CPI 0.4% -0.4% 0.3% 0.9%

Mort. payment Housing startsMedian home share of income House prices 3-month avg.

price / 12 months ago Y/Y chg. / 10yr avgCanada $579,969 43.8% / 49.4% 3.8% 192.7K / 201.2K

Toronto $880,934 57.5% / 63.8% 6.4% 39.1K / 37.5KVancouver $1,022,165 69.0% / 85.1% -0.7% 19.0K / 21.8KMontreal $359,327 30.0% / 32.9% 7.5% 12.6K / 20.9KCalgary $432,340 27.1% / 30.4% -1.3% 9.3K / 11.8K

United States --- --- 4.2% 1466.3K / 1016.3K

Latest 6-month trend 3 mth ann chg 12-month chgCanada 33.0 2.5% 0.1%United States 36.1 -20.0% -5.5%Eurozone 33.4 1.2% -1.6%Japan 41.9 -8.3% -6.8%China 49.4 --- ---

Policy rate 12 months ago Trend Next announceBank of Canada 0.25% 1.75% 06/03/2020Fed Reserve (upper bound) 0.25% 2.50% 06/10/2020

Q/Q ann Q/Q ann Y/Y Y/YLatest Previous Latest 6 months ago

Canada 0.3% (Q4) 1.1% (Q3) 1.5% 1.6%United States -4.8% (Q1) 2.1% (Q4) 0.3% 2.3%Eurozone -14.5% (Q1) 0.4% (Q4) -3.3% 1.0%Japan -7.1% (Q4) 0.1% (Q3) -0.7% 1.8%

Q4 2019 Q3 2019 Q2 2019 Q1 2019GDP 0.3 1.1 3.4 1.0

Consumption 1.1 1.1 0.2 1.3Business Investment -0.6 0.6 -0.7 1.2Nonprofit Sector 0.1 0.0 0.0 0.1Residential Investment 0.1 0.9 0.4 -0.2Government 0.1 0.5 0.2 0.7Final Domestic Demand 0.8 3.1 0.2 3.1

Exports -1.6 -0.2 3.3 -1.3Imports 0.8 0.1 1.4 -2.8Trade -0.8 -0.1 4.7 -4.1

Inventories 0.6 -1.8 -1.4 1.9Statistical discrepancy -0.2 0.0 0.0 0.1

Markit manufacturing PMI Industrial production

Central Banks

GDP Growth

Contributions to real GDP growth - Canada

Manufacturing Sector

JobsUnemployment rate Employment change

Inflation

Housing Market

-2

-1

0

1

2

3

4

5

Canada (CPI) United States (PCE)

2

4

6

8

10

12

14

16

Canada United States

y/y % chg.

0

1

2

3

4

5

6

7

BoC Fed (upper bound)

%

30

35

40

45

50

55

60

65

CA U.S. EZ JP CH

Index

%

Markit manufacturing PMIs

Central banks' policy rates

Headline inflation

Unemployment rate

9






Montreal Office Toronto Office 514-879-2529 416-869-8598

Stéfane Marion Matthieu Arseneau Warren Lovely Chief Economist and Strategist Deputy Chief Economist Chief Rate Strategist, Economics and Strategy [email protected] [email protected] [email protected]

Krishen Rangasamy Paul-André Pinsonnault Marc Pinsonneault Taylor Schleich Senior Economist Senior Economist Senior Economist Associate, Rates Strategist, Economics and Strategy [email protected] [email protected] [email protected] [email protected]

Kyle Dahms Jocelyn Paquet Angelo Katsoras Economist Economist Geopolitical Analyst [email protected] [email protected] [email protected]

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