Some upcoming events, an interest rate hike, and more!
Written By: Peter Robertson, Judy Lee, and Sumeet Dhat
Economy at a Glance
Economist of the Week
Economics Society News, Events, and Articles
The deadline for our writing contest has been extended! You now have until March 20th to hand in your submissions. More details here.
Join our upcoming upcoming webinars with CFEE and National bank about managing your money as a student. We have a session for international students on March 9th that you can sign up for here and a more general session on March 17th that you can sign up for here.
We’re also hosting a declare your major panel for any first-year students thinking about majoring in economics on March 14th. Sign up here.
The Economics Behind Fast Fashion – by Arshiya Chaudhary
News and Noteworthy
Canada’s new sanctions targeting Russia could hurt Canada’s economy as well, Freeland says
Finance minister Chrystia Freeland warned that strict sanctions placed on Russia last week could hurt Canadians as well. These sanctions include a ban on all Russian petroleum products of which Canada purchased $257 million last year. In her speech Freeland stated “If we are truly determined to stand with Ukraine, if the stakes in this fight are as high as I believe them to be, we have to be honest with ourselves, I have to be honest with Canadians, that there could be some collateral damage in Canada”. Read more.
Canada’s economy grows 6.7% annualized despite lockdowns
New GDP data released this week showed that Canada’s economy grew at an annualized rate of 6.7% for the 4th quarter last year. This increase is higher than the 5.5% annualized increase seen in the 3rd quarter and slightly beat projections which had expected a rate closer to 6.5%. Although output was flat for December, preliminary data is showing that a small increase of about 0.2% can be expected for the month of January. Read more.
Macklem says Bank of Canada needs to raise rates to put a lid on inflation expectations
After the Bank of Canada hiked it’s interest for the first time since October 2018 earlier this week, it’s governor voiced his concerns about inflation expectations. He referenced the negative effects sustained inflation had on Canada’s economy in the 1970’s and restated the importance of anchoring inflation expectations.The BoC increased its key interest rate to 0.5% on Wednesday from it’s low of 0.25% that it had been left at since the start of the pandemic. Read more.
US economy added 678,000 jobs in February, cementing case for rate rises
Building on an upwardly revised 481,000 positions created in January, US jobs growth accelerated sharply as employers added 678,000 jobs in February. This bounceback from Omicron eclipsed economists’ expectations and pushed the unemployment rate to 3.8 per cent. Moreover, job growth was “widespread”, with new positions added to the hospitality sector, professional and business services, retail, construction, and healthcare. Read more.
Bank of Canada’s interest rate hike likely won’t cool housing, experts say
Interest rates are going up for the first time since 2018, which will mean higher monthly costs for people carrying debt. However, prospective home buyers aren’t letting the rate hike deter them from buying because they’ve lived through years of home price increases and interest rates are still lower than pre-pandemic levels. As pent-up demand for homes is high and supply still scarce, experts say this 0.5 per cent rate hike will not cool the country’s heated real estate market. Read more.
Canadian dollar posts weekly decline as Ukraine fears weigh
The Canadian dollar weakened against its U.S. counterpart as the war in Ukraine escalated, with Russia seizing a big nuclear plant. The loonie was trading 0.4% lower at 1.2735 to the greenback. Looking ahead, Canada’s dollar will strengthen over the coming year as soaring commodity prices boost the domestic economic outlook and the Bank of Canada hikes interest rates further. Read more.