Recent indicators have generally disappointed in July, but still point toward moderate growth. The Ivey index indicated positive growth compared to a year earlier in July. The trend of the economy adding fulltime jobs while cutting part-time employment continued in July. The housing market has stayed strong, but rising rates will cool demand beginning in the fourth quarter.
Growth in retail sales excluding auto dealers & gas stations has stayed positive during some difficult months. Retail spending, recently unusually volatile, will continue to grow at a healthy pace. Recent below expected inflation will likely lead the Bank of Canada to cut rates on September 3rd by 25 basis points. Canadian long-term interest rates will continue to trend higher throughout the year. The recent power outage will have a small impact on the economy.
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