New inflation data, employment data and more!
Written By: Peter Robertson and Judy Lee
Canada’s Economy at a Glance
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News and Noteworthy
Inflation hit 5.7% in February. Economists say it hasn’t peaked
New CPI data released this week showed that inflation has continued to rise, now hitting it’s highest levels since August 1991. A large portion of this month’s rise can be attributed to increased gas prices which are up 32.3% year-over-year. Excluding gas, the inflation rate would have been 4.7% compared to the reported 5.7%. Grocery prices have also risen by 7.4% year-over-year, the highest increase since 2009. Read more.
Canadians cutting back spending on groceries, restaurants as inflation rises: poll
New polling data released by Leger this week showed the effect inflation is having on the spending habits of Canadians. Four out of five respondents indicated that they plan to buy cheaper items at the grocery store and three out of four said that they plan to cut back on household spending and eating out. Rising oil prices are also expected to cost Canadians $600 this year, leading a third of respondents to have started to consider buying an electric vehicle. Read more.
Canada added 337,000 jobs last month, twice what was expected
After unemployment rose for the first time in nearly a year in January, Canada’s job market bounced back significantly for the month of February. The new unemployment rate of 5.7% is lower than it was before the pandemic started and is approaching the all-time low of 5.4% seen in May 2019. The largest gains for February were seen in the food and accommodations sectors which added over 114,000 new jobs. Read more.
Oil supply shortage fears add to price volatility
Renewed anxieties about global supply shortages are pushing oil prices higher again. Although western countries have released oil from emergency reserves to cool oil prices that remain more than twice as high as their long-term historical average. Any loss of Russian output would squeeze a fragile market in which global oil supplies were already failing to keep pace with surging post-pandemic demand. Read more.
Ukraine war will have ripple effects throughout global economy: IMF head
The global economy is linked in complicated ways that may not be obvious at first. Ukraine and Russia together account for more than a quarter of the global trade in wheat, and a fifth of corn sales. The longer Russian forces remain in Ukraine, the more food security far beyond the region is threatened. IMF highlighted risks including unrest in regions like the Middle East and Africa, triggered by higher food costs, and fiscal strains in Europe where spending on energy security and defense is set to rise. Read more.
Canadian home prices up 20.6% but market could be nearing turning point
Thanks to a 23.7 per cent increase in new listings, combined with higher interest rates and higher prices, the housing market could be at a turning point where price growth begins to slow down and inventories finally begin to recover after seven years of declines. The need for more supply is a view shared by many experts, with some expecting more new listings and the other feeling unsure whether the trend will continue into the spring. Read more.