Economics Newsletter – July 24, 2022

New UWES articles, a stock contest update, CPI data, and more!

Written By: Peter Robertson and Syed Afridi

Canada’s Economy at a Glance

Economics Society News, Events, and Articles 

-Check out our latest original articles – The Basics of Universal Basic Income by Pashmina Rupani and From Red to Blue: Marvel’s Guide to Reinstate a Blue Ocean by Arshiya Chaudhary!

-Check out how you’re doing in our stock contest in the updated rankings below. Winners will be announced August 6th!

News and Noteworthy

Canada reaching ‘end of the food inflation tunnel’: expert

Despite the continued rise in inflation for the month of June, some industry experts believe inflation has peaked on food products. Director of the Agri-Food Analytics Lab Sylvian Charlebois said in an interview “the good news is that I believe that our food inflation rate has peaked in our country, so we’re starting to see the end of the food inflation tunnel, finally”. Charlebois cites supply chain improvements and a strong upcoming harvest as reasons for why we can expect inflation to slow down on food products. Read more.

‘Historic’ correction grips Canada’s housing market, RBC says

A new report from RBC projects real estate prices to fall by over 12% through early next year, more than any other correction over the past 40 years. The report also projects a record 2-year decline in home sales, with projections of a 23% decline this year and a 15% decline next year. This news comes as the Bank of Canada is expected to continue to hike interest rates to as much as 3.25% by October. Read more.

Hiring process ‘broken’ in many Canadian firms, experts say. What’s the fix?

Experts believe that many Canadian companies need to address their “broken” hiring processes in order to combat the effect of the labour shortage as unemployment rates reach record lows. Professor Nita Chhinzer from the University of Guelph believes companies need to become less reliant on referrals and word of mouth for new hires, as well as offer more than just compensation with benefits like hybrid work environments. The current application process leaves many people feeling alienated as they have no idea what the current status of their applications are when applying through online job boards.  Read more.

US business activity contracts in July for first time in 2 years 

US business activity contracted in July for the first time in more than two years as manufacturers and service providers signalled sluggish demand that only adds to heightened recession anxieties. The S&P Global flash composite purchasing managers output index slid 4.8 points to 47.5, the weakest reading since May 2020, the group reported Friday. Outside of the early months of the pandemic, the July figure is the weakest in data back to 2009. Readings below 50 indicate contraction. The new orders gauge expanded modestly after contracting the previous month. Read more.

White House announces new $270m military package for Ukraine

The White House has announced that the United States will send an additional $270m in security assistance to Ukraine, a package that will include more medium-range rocket systems and tactical drones. The announcement on Friday brings the total US security assistance committed to Ukraine by the administration of US President Joe Biden to $8.2bn, and is being paid for through $40bn in economic and security aid for Ukraine approved by Congress in May. Read more.

Twitter misses sales estimates amid Musk legal battle

Twitter Inc. reported disappointing second-quarter sales on Friday, another blow to a company that is already fighting a high-profile legal battle with Elon Musk over the fate of the social network.Revenue fell 1% in the quarter from a year earlier, its first annual decline since the middle of the pandemic in 2020. Sales totaled $1.18 billion in the quarter, which fell short of the $1.32 billion analysts estimated. The company said “advertising industry headwinds associated with the macroenvironment as well as uncertainty related to the pending acquisition of Twitter” were factors in the disappointing results. Read More.

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