Latest reports and articles from our top-ranked Economics team

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THE WEEK AHEAD: Just one side of the story?

This week saw Fed Chair Jerome Powell admit to some of the mistakes his Bank, and others, made during the pandemic. Yet while the speedy recovery in demand caught many off guard, he appeared to pin much of the blame still on supply issues. Policymakers are now working to “get smarter” on forecasting the supply side of the economy, because previously “much too much” emphasis had been placed on managing demand.
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Economics Reports

In focus: Where have all the workers gone? Part 2

A few weeks ago, in our week ahead publication titled “where have all the workers gone”, we highlighted the issue of missing workers in the Canadian labour market and speculated about some of the factors that led to the dramatic increase in job vacancies—mainly for low skilled positions. Here we try to go a bit beyond speculation by tackling that question using special tabulations we obtained from Statisics Canada.
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Economics Reports

The Week Ahead: Comings and goings

Last week, Statistics Canada released its daily tourism data for May, covering arrivals at major airports. The data continued to show a rapid rebound, and anyone who has been through an airport recently will know that demand appears to be recovering faster than supply. However, what’s also becoming clear is that the recovery in Canadians going abroad has moved well ahead of visitors coming into the country (Chart).
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Economics Reports

Economic Insights - Long run inflation: Can we do two?

There’s little doubt that major central banks are fully engaged in an effort to bring inflation back down to earth. Monetary tightening will push up interest rates in the months ahead, and given intensified price pressures, we’ve moved all of the rate hikes into 2022 and added to our peak targets in the US and Canada (Tables 3 and 4, page 6) from where we stood a month ago. That will likely include 75 basis point hikes by both the Bank of Canada and the US Fed at their next rate setting dates.
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Economics Reports

The Week Ahead: Avoiding the hobgoblin of small minds

If, as they say, consistency is the hobgoblin of small minds, then it’s a good thing that central bankers feel free to change their minds when the facts also change. So it’s not entirely surprising that, in the face of upside surprises in inflation, the Bank of Canada, which started its rate hike cycle with a traditional quarter point move, has now made 50 basis point tightenings the new normal.
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Economics Reports

The Week Ahead: Bad news as good news

They used to say that “what’s good for General Motors is good for America”, but that was back in the days when GM was the country’s largest company. Today’s version might substitute Amazon or Walmart, given that they dwarf any automaker in sales and market capitalization. But we’re actually at the stage of the cycle where what’s bad, or at least disappointing, for these and other retail giants could be seen as good for America in the medium term.
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