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  • Frank Tian

🇨🇦 Canada Macro Update

July inflation is out … +7.6% Y/Y.


Finally, it is moving in the right direction, but still outpacing wages.


🟨 July inflation down to 7.6% Y/Y vs. 8.1% in June.

🟨 July average hourly wages: +5.2% Y/Y.


Despite # of jobs down slightly in the last 2 months, the unemployment rate is still below the pre-pandemic level.


🟩 May # of job vacancies remain at 1.0 million

🟩 July jobs dropped slightly: -31, 000 or -0.2% M/M

🟩 July unemployment rate unchanged at 4.9% (vs. 5.7% in Feb 2020)


Consumer confidence began to stabilize near the bottom.


🟧 Aug consumer confidence (Bloomberg-Nanos): +1.1 points M/M to 46.67


All of these follow similar trends south of the border.


The implication of the next rate hike?


BoC can opt for 50 bps vs. 75 bps, not dampening the overall demand too fast.


🟦 This year’s cumulative rate hike has reached 225 bps.

🟦 July avg housing $ sales dropped 23% from Feb peak.

🟦 July HPI index down 6% from Feb peak, still +11% Y/Y.


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