Here is the latest economic news for this week that could impact interest rates, the value of your home and the cost of consumer goods.
The Canadian labour market added another $53,000 jobs. Wage growth picked up as the unemployment rate fell to near-historic lows.
The housing market continued to recover and this has contributed to an increase in mortgage growth for the banks. Indeed, lower mortgage rates has meant an acceleration in mortgage credit. Data released over this past weekend showed a strong pick-up in mortgage credit in August. Consumer credit also surged, nearly doubling the growth rate observed in the first seven months of 2019. On the whole, household credit growth posted the strongest increase in two years and could signal an increase in household vulnerabilities.
Given this the Bank of Canada appears likely to leave the Prime rate as is for now although we still feel there is pressure for a drop given the U.S. may lower rates again.
Manufacturing sales are poised to rebound with a 1.0% advance in August. This follows a 1.3% contraction in July which reflected a sharp drop in primary metals alongside auto production shutdowns.
Oil prices rose as an Iranian oil tanker was hit by missiles on Friday.
There is some more indication that the U.S. may lower their rates further which may finally give us a Prime Rate decrease in Canada.
Fixed mortgage rates here increased ever so slightly as bond prices rose.
The Canadian housing market has benefitted from the gains in jobs and wages. Homebuilding numbers were solid in September, with Ontario and B.C. seeing housing starts rise from August. The gain in B.C. was particularly encouraging after a significant decline in August.
The U.S. and China said they agreed in principle on the first phase of a trade accord that could de-escalate tensions between the two economic powers, with the U.S. saying it would hold off on ramping up tariffs next week and China saying it agreed to ramp up its purchases of U.S. agricultural products.
“We’ve come to a very substantial phase one deal,” President Trump told reporters after meeting with Chinese Vice Premier Liu He in the White House. There was a significant increase in the US stock market on Friday as a result of this.
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