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What happened last week?
North American equity indexes rose or fell less than 1 percent last week. They were relatively unaffected by economic news last week, despite several significant releases in Canada, the U.S. and Europe:
- Payroll employment in Canada decreased by 47,300 in June, a decline of 0.3%. It was the first monthly decline in 2024. Since the beginning of the year, including June’s decline, employment has grown by 110,400. Job vacancies were little changed and stand at 554,000. StatsCan release
- “Real gross domestic product (GDP) increased 0.5% in the second quarter after rising 0.4% in the first quarter” according to StatsCan's release on Friday. The Canadian economy grew at an annualized rate of 2.1% in the second quarter as GDP per capita fell for the fifth consecutive quarter. The annualized growth rate was above the Bank of Canada’s estimate from July and above economist expectations, providing ample reason for the Bank of Canada to continue cutting interest rates. CBC and GDP
- U.S. GDP grew at an 3.0% annualized rate in the second quarter. It was an upward revision from 2.8% reported last month, and more than double the 1.4% reported in the first quarter. Based on the improving economic activity the likelihood of a Federal Reserve rate cut of ½ percent fell, as did the expectation for a recession.
CNBC and GDP
- U.S. inflation measured by core Personal Consumption Expenditures (PCE) price index increased 0.2% in July and 2.6% from a year ago. Core PCE excludes relatively more volatile food and energy. BEA PCE release CNBC and PCE
- Eurozone inflation fell to 2.2% in a flash-estimate for August, down from 2.6% in July, and the lowest level in 3 years. EuroStat release.
What’s ahead for this week and beyond?
In Canada, the week begins with Labour Day on Monday, followed by the release of imports, exports and trade balance and labour productivity. On Wednesday, the Bank of Canada will announce an interest rate decision and conduct an explanatory press conference.
In the U.S, manufacturing and services Purchasing Managers Indexes (PMI), which show business optimism, construction spending, factory orders, durable goods orders, vehicle sales, imports, exports, trade balance will be released. The non-farm payroll report, which includes the participation and unemployment rates, will arrive on Friday.
Globally, Eurozone Gross Domestic Product, employment report, various PMIs, retail sales and Producer Price Index, Japan’s PMIs, household spending, wages and foreign investment, China’s PMIs, imports, exports and trade balance will be reported.
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