Time for your cheat sheet on this week’s top stories.
Canadian Real Estate
Canadians Have Only Fled The Country Faster 4 Times Since 1967
Canadian citizens are leaving in some of the highest volumes on record. Canadian emigrants, those leaving permanently, rose 3% from last year to 29,100 people in Q3 2024. The third quarter is typically the highest, and this was the biggest Q3 since 2019. It also happens to be the fifth largest on record since 1967, when Canada first formalized its immigration system. The outflows may be even more problematic considering it was recently revealed the number of immigrants the country retained has been inflated. Not just recently, but an issue that goes back decades.
Canada Gained 76k Jobs… Or Lost 173k, Depends On The Data Set
Canada’s labor market surprised with growth topping expectations… or it lost tens of thousands of jobs. Depends on whether you’re looking at the seasonally adjusted model or raw data. Adjusted data shows the unemployment rate fell for a second consecutive month, with the economy adding 10s of thousands of jobs. Unadjusted data shows the unemployment rate just climbed to the second-highest monthly rate since the 2021 recession. Seasonally adjusted data is often preferred since it eliminates noise by eliminating predictable annual patterns. Unfortunately, in a less predictable world it may be over-adjusting and minimizing the visibility of a very real problem.
Canada’s National Housing Agency’s Forecast Is More Like Fan Fiction
Canada’s latest Housing Outlook may sound like a forecast, but it more accurately resembles fan fiction. The CMHC warned that tariffs can trigger a worst case scenario that sees higher unemployment, falling GDP, and… rising home prices? Um, sure. If the state-owned insurer’s outlook seems like a dishonest attempt at forecasting, that’s because it was. A quick look at their last outlook shows they see the “devastating” impact of a trade war would have a smaller impact than last year’s market with no obvious economic threats.
Toronto Real Estate Prices Rise As Sales Fall & Inventory Surges 70% Higher
Toronto real estate prices are rising as buyers face, uh, loosening market conditions? That’s not how that works, but TRREB data shows home prices rose in January while home sales fell and inventory surged 70% higher. Despite being one of the weakest demand balances on record, buyers decided they should pay more— a sign of exuberance. If the FOMO doesn’t catch on and firm the demand balance, it’s going to be difficult for this trend to hold.
Canadian Interest Rates To Plunge Further, Test Historic Extremes: BMO
Canada and the US may enter a trade war, plunging the former into a serious recession. Economists at BMO Capital Markets are warning investors that the country’s central bank is likely to slash rates further in response. It’s a risky gamble since a recession typically requires cheap credit to stimulate demand and help raise the price of goods. At the same time, tariffs are expected to be inflationary. It’s not a risk-free move, since monetary expansion is meant to increase inflation—using it to address inflation is a slippery slope to stagflation, a term used to describe a period of high unemployment and rising prices.
