TEC Canada is pleased to provide the monthly Andersen Economic Report exclusively to our members to offer professional updates on the current economic environment in Canada, the USA, and globally. As 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.
September 2023 PREVIEW:
Canada | Rising Wages, Falling Productivity: Canada’s Economic Challenge and the Impending Bank of Canada Interest Rate Decision
Canada’s grappling with a wage inflation challenge as average hourly wages spiked by 5.0% in the past year, while productivity has been steadily declining. This is pushing labour costs up, and the Bank of Canada (BOC) is considering more aggressive interest rate hikes compared to the U.S. The BOC’s recent announcement of another interest rate hike on September 6th has already influenced the Canadian dollar, causing it to approach or exceed 78 cents (US), which has sparked concerns about Canada’s economic stability.
United States | Temporary Employment Declines, Wage Inflation Soars, and the Federal Reserve’s Inflation Battle
Temporary help employment has declined in 7 of the last 9 months, indicating shifts in the economy. In July, hourly wages rose up by 0.4%, with a year-on-year spike of 4.4%, raising concerns for the Federal Reserve and profit margins. On the flip side, U.S. business sector productivity improved by 1.3% year-on-year in the 2nd Quarter, it still remains below the usual long-term trend. Even if this pace is maintained, this trend won’t help the Fed hit the 2% inflation target due to elevated price expectations and rising bond yields, further complicating the central bank’s policy decisions.
Global Economic Outlook | Oil Price Surge Sparks Concerns: Impact on Gasoline Costs, Consumer Inflation, and the Role of Global Production
Surging world oil prices, currently around $84.78 per barrel for Brent crude, could lead to higher gasoline costs and increased consumer price inflation. Gasoline prices strongly influence wage settlements as they are a visible daily expense for the consumer. Saudi Arabia’s ongoing production cut is driving up oil prices, and the U.S. is unable to offset this due to stagnant domestic oil production, creating a challenging economic landscape that requires careful monitoring by policymakers and economists.
Excited to delve into the full September 2023 Andersen Economic Report? As a valued member of TEC Canada, you can access the complete report under the ‘Resources’ section of the TEC Canada App!
While the Andersen Economic Report is an exclusive TEC member resource, we have compiled insights from several global leaders on our website. If you would like to receive similar information more regularly, sign up for our newsletter here: