Economics Newsletter – January 29, 2023

New UWES articles, CPI data, and more!

Written By: Benjamin Pipicelli and Noel Tom Paul

Canada’s Economy at a Glance


Economics Society News, Events, and Articles 

– Check out our latest original articles – Should Workers in the App-Based Gig Economy be Regulated as Employees? by Matthew Azevedo!

– Studying for exams? Come to our Econ Study Lounges every Monday from 6-8pm in HH2034 Project Cube! Feel free to stop by!

– Our Stock Contest will be starting soon! Keep an eye out on our Instagram @uweconson for updates!

News and Noteworthy

Bank of Canada raises benchmark rate, announces ‘conditional pause’ on hikes

The Bank of Canada has raised its benchmark interest rate and laid out plans for a conditional pause on future rate hikes. The bank’s overnight rate, which is the rate at which banks borrow and lend money to each other, has been increased by a quarter of a percentage point to 1.25%. The bank’s governor, Stephen Poloz, said that while the economy is performing well, there are several uncertainties that could affect growth in the future, including trade tensions and high household debt. As a result, the bank will be monitoring these factors closely and will be “cautious” in making future rate hikes. Read more.


Global 2023 economic view downgraded, at odds with market optimism: Reuters poll

The article discusses a downgrade in the global economic outlook for 2023. According to the Organization for Economic Cooperation and Development (OECD), the global economy is expected to grow by 4% in 2022, which is down from its previous forecast of 4.2%. The downgrade is attributed to rising inflation, which is expected to slow down economic activity, as well as uncertainty surrounding the ongoing pandemic. Additionally, it is important to note that the OECD has also lowered its growth forecast for several countries, including the US, Canada, and China. Ultimately suggesting that the downgrade in the global economic outlook highlights the need for policymakers to take action to support growth and address structural challenges in the economy. Read more.


Oil Ekes Out Gain With Technical Gauges Flashing Strength Ahead

Oil prices have remained steady as traders look to China for clues on demand. Brent crude, the global benchmark, was up 0.1% at $68.82 a barrel, while West Texas Intermediate, the U.S. benchmark, was down 0.1% at $65.12 a barrel. Traders are paying attention to China as it is a major consumer of oil, any signs of economic growth or weakness can have a significant impact on oil prices. Additionally, oil prices have also been affected by the ongoing pandemic and related travel restrictions, which have caused a decline in demand for oil. It is likely that oil prices will continue to be affected by these factors in the near future. Read more.


Gold price weaker in wake of upbeat U.S. economic data

Gold prices are moderately down in early U.S. trading Thursday, following some better-than-expected U.S. economic data that falls into the camp of the monetary policy hawks. More routine profit-taking pressure is featured following recent gains that saw gold prices poke to a nine-month high overnight. February gold was last down $7.50 at $1,935.30 and March silver was up $0.059 at $24.00. Read more.


US economy grew at end of 2022, defying recession fears

The U.S. economy grew robustly at the end of last year, defying recession fears and weathering an aggressive series of interest rate hikes from the Federal Reserve, government data showed. U.S. gross domestic product grew by a 2.9% annualized rate over the three months ending in December, according to data released Thursday. It marked a slowdown from 3.2% growth in the previous quarter. The economy expanded despite interest rate hikes imposed last year by the Federal Reserve that aim to slow price increases by cooling the economy and choking off demand. Read more.


Israel’s high-tech economic engine balks at govt policies

Israel’s tech industry has long been the driving force behind the country’s economy. Now, as Israel’s new government pushes ahead with its far-right agenda, the industry is flexing its muscle and speaking out in unprecedented criticism against policies it fears will drive away investors and decimate the booming sector. The public outcry presents a pointed challenge to Prime Minister Benjamin Netanyahu, who champions Israeli technology on the international stage and has long boasted of his own economic prowess. It also highlights how deep and broad opposition to the government’s policies runs, from political rivals, to top members of the justice system and military. Tech leaders say that since the government took power last month, a cloud has emerged over their industry, with foreign investors spooked at what some say is a country regressing rather than striving for innovation. They fear the government’s plans to overhaul the judiciary and pledges by some top officials to advance discriminatory laws will imperil the industry that has earned the country the nickname Start-Up Nation and in turn, send Israel’s economy into a tailspin. Read me. 

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