Andersen Monthly Economic Report – January 2019

janvier 25th, 2019|Insights|
  • Peter Anderson Monthly Economic Report

TEC Canada is pleased to provide the Anderson Monthly Economic Report exclusively to our members. The former assistant chief of the Bank of Canada’s research department, Dr. Peter Andersen provides valuable economic insight to help you make better business decisions.

REPORT SUMMARY

With the U.S. economic growth this strong, operating profits from current production are capable of an annual increase of close to 10%, which is stronger than the consensus forecast. The assumption that the stimulus is about to wear off is wrong and a recession is not likely to happen until after 2020.The risk of recession also remains low in Canada, despite the economy slowing down in early 2019.

CANADA

  • Alberta will experience a serious setback from the 9% oil production cut, which will impact the GDP. British Columbia and Saskatchewan are expected to avoid the slowdown (British Columbia benefiting from the LNG Canada project construction beginning in 2019) and Saskatchewan is expected to show stable growth from investment spending.

UNITED STATES

  • The partial U.S. government shutdown will likely have a small negative impact on 1st Quarter real GDP growth; the next payroll employment report for January will be released on February 1st and will be examined to measure the impact of the government shutdown.*

INTERNATIONAL

  • Trade war fears have begun to subside with a China-U.S. trade agreement expected in February. The elimination of the trade war threat to the global economy will diminish the safe-haven inflow to USD investment creating a lower USD and providing a stimulus for the global economy.

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*Partial U.S. Government Shutdown: The partial government shutdown began on Dec. 22, 2018, and centers on President Trump’s request for over $5bn in funding towards a proposed border wall, which Democrats oppose. The key question is: when will it end? The working assumption is that there will be a compromise and an end to the shutdown before the end of February. As such, February will be a key month for business and consumer confidence.

> ‘Everybody’s in the dark’: How the U.S. government shutdown is starting to hurt Canada
> How Canada avoids U.S.-style government shutdowns
> IRS shutdown may lead to complications for Canadians
> Government shutdown timeline: See how the effects are piling up

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