Andersen Report: An Exclusive Preview of the February 2024 Report

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.

February 2024 PREVIEW:

Canada | Economic Growth Slows, No Recession Expected, Anticipated Interest Rate Reductions

Canada’s economy lags behind the United States, evident in its minimal 100-worker monthly employment increase in December and a 1.2% annual decline in real GDP in Q3. Despite concerns of a recession, experts don’t foresee one in Canada for 2024, relying on the historical trend that Canadian recessions coincide with US recessions. The Bank of Canada is expected to cut interest rates before the US Fed due to the weaker economy, potentially pushing the CAD lower, currently at around 74 cents (U.S.), though the decision is complicated by a 5.2% year-on-year wage inflation.

United States | Economy Continues to Expand, Robust Job Creation Driving Retail Sales, Concerns Around Rising Inflation

Experiencing robust growth, the US economy expanded at an annualized rate of about 2-1/4% in the 4th Quarter, following a 4.9% growth in the 3rd Quarter. Job creation remained strong, with a 216,000 increase in non-farm payroll employment in December. Christmas sales surpassed expectations, and interest rates showed no signs of dampening demand, with a 0.6% monthly increase in December retail sales. As long as the tight job market persists and layoffs are minimal, consumers are expected to sustain spending. However, rising government bond yields and interest payments pose increasing concerns amid sustained inflation.

Global | Economic Challenges Persist, Industrial Production in Euro Area Weakens, Geopolitical Risks Affect Crude Prices

Global economic challenges persist, especially for developing nations compared to the U.S. 2024 growth forecasts have been revised down to 2.4%, down from 2.7% in November. The Euro Area faces industrial production weakness, and a potential U.S.-led investment rebound is hindered by the budget deficit, raising concerns about rising interest costs. Despite unsustainable budget problems, the U.S. dollar may stay strong due to heavy borrowing from abroad. A weak global economy, alongside record U.S. oil production, has lowered crude oil prices, with potential shifts due to geopolitical risks like those in the Red Sea.

Excited to dive into the full February 2024 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!