Economics Newsletter – May 15, 2022

Our first newsletter of the term! The stock contest is back and lots of other news!

Written By: Peter Robertson and Syed Afridi

Canada’s Economy at a Glance

Economics Society News, Events, and Articles 

  • Deadline for stock competition submissions is the 16th of May. Enter here!
  • The Economics Society is excited to welcome all the new Execs into the team!

News and Noteworthy

BoC’s Gravelle says ‘perfect storm’ fuelling inflation, but key differences from ’70s
In a speech earlier this week Bank of Canada deputy governor Toni Gravelle called the factors causing the current rise in inflation a “perfect storm”. He mentioned a combination of factors including the strong economic recovery from COVID-19, supply chain disruptions, and the Russia-Ukraine conflict. Gravelle was clear to point out that the current situation is quite different from the inflation scare of the 70’s though, as the record inflation rates of that decade were also paired with high unemployment and minimal economic growth, Read more.

Unemployment rate drops to 5.2% in April, marking new low: Statistics Canada
Canada’s unemployment rate continued to fall for the month of April reaching another record low while adding 15,300 new jobs. This drops the unemployment rate to 5.2% compared to 5.3% in March and 8.1% a year ago. BMO chief economist Douglas Porter said in a speech that normally unemployment rates this low would be worrying for growth paired with inflation, but the relatively moderate year-over-year increase in wages of 3.3% could make this less of an issue.  Read more.

Crypto markets tumble and investors get their fingers burned
A securities lawyer and professor from the University of Calgary Roger Clements is worried that recent declines in the cryptocurrency market could have a much wider effect on the economy. A notable cryptocurrency bear, Clements released a paper earlier this year on why he believes cryptocurrency is bound to fail. Cryptocurrency asset values have fallen more than $1 trillion USD from their peak and continue to fall. In an interview earlier this week Clements mentioned his belief that many of the investors bearing the brunt of the losses had no idea what they were getting into – “I’m not sure … that people knew what they were getting themselves into”. Read more.

Elon Musk puts Twitter deal ‘on hold’ over spam bot data — but he’s ‘still committed’
Elon Musk said Friday that his planned US$44-billion purchase of Twitter is “temporarily on hold” pending details on spam and fake accounts on the social media platform, adding later that he’s “still committed” to the acquisition. Musk tweeted that he wanted to pinpoint the number of spam and fake accounts on the social media platform. Musk has been vocal about his desire to clean up Twitter’s problem with “spam bots” that mimic real people and appeared to question whether the company was underreporting them. Read More.

Weekend gas prices on the rise across Canada as experts urge motorists to reduce travel
​​National gas prices continued their staggering rise this weekend, with drivers in Vancouver told to brace for as much as $2.34 per liter at the pumps. Figures on the fuel tracker GasBuddy showed the national average price of regular gas reached $1.95 per liter on Saturday afternoon, with provincial averages reaching $2.15 in Newfoundland and Labrador and $2.11 in British Columbia. Read More.

NATO Lauds Historic Moment as Finland Asks to Join Alliance
NATO welcomed Finland’s decision to seek entry into the defense alliance in a historic move following Russia’s invasion of Ukraine that ends the Nordic nation’s long-held stance of military non-alignment.Finland’s formal decision was made on Sunday and requires sign-off by the parliament, expected within days. It’s pulling neighboring Sweden along, with a decision by the ruling party in that country slated for later on Sunday in Stockholm. Read More.

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