This is the most disappointing chart in the US economy, via Deutsche Bank's Torsten Sløk. What we're looking at here is an economy that appeared close to reaching "full capacity" and "full employment" before drifting away from those milestones.
At 1 p.m., President Barack Obama will give a speech on the economy at Knox College in Illinois. It's the first in a series of economic speeches Obama will give in the coming weeks. The White House has set up a website to promote the speeches. So far, it has no real policy content. But it does have this chart.
Moments ago, the Bank of Canada's chief finally said what we had been patiently waiting for over the past several months: admission that Europe's experiment with negative rates is about to cross the Atlantic. From Market News:
LONDON: The coming week will provide clues on whether the global economy is escaping from its lacklustre growth rut, amid growing concerns of another downturn which central banks have few tools left to fight. China has become the focal point for economists as they fear a hard landing there could send countries that have only just escaped from the doldrums reeling back into recession. Beijing will publish September trade data on Tuesday and inflation on Wednesday and any significant deviation from expectations could set the tone for the week.
The Bank of Canada held its key rate at 0.75% Wednesday, a move or lack thereof that was expected by almost all economists.
Since Governor Stephen Poloz surprised markets with a quarter point cut in January that nobody saw coming, investors have been betting on another rate cut later this year.
OTTAWA — We know the Canadian economy has been performing as expected, which means moderately — and that’s being generous.
But it’s the level of growth in the coming months, and years, that is punctuated with question marks.
On Tuesday, it was Finance Minister Bill Morneau job to provide a big chunk of guidance — even though we’re still only halfway through fiscal 2016-17, and a lot of uncertainty will be spread into the foreseeable future.
The assessment, in short, is disappointing.
OTTAWA — Justin Trudeau is talking up the need for more federal spending to help the economy on a day experts are sharing their downgraded forecasts with his government.
The prime minister says the country’s economic woes mean it’s more important than ever for the Liberal government to spend on growth-generating projects like infrastructure.
Trudeau’s remarks in Toronto came shortly after a group of private-sector economists shared their downgraded forecasts with Finance Minister Bill Morneau at a meeting just a few kilometres away.
Canada’s economy created twice as many jobs as expected in March and the unemployment rate dropped for the first time this year, but private-sector and full-time hiring remained weak in a sign businesses remain cautious amid a slack economy.
Boy, is this bullish. In a note to clients following Thursday's blockbuster initial jobless claims report, Chris Rupkey, chief financial economy at MUFG, wrote that, "Current labor market conditions are the tightest in a generation." Rupkey also argued that, "You have to go back not one, not two, but six recessions ago to find a stronger labor market. Madame Chair [Yellen], raise the Fed funds rate before it's too late."