Monthly Market Insights: May 2019

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Every month, Cambrian shares the Monthly Economic Commentary provided by our partners at Credential Financial Inc.. If you're looking for advice or have questions about the Monthly Economic Commentary, advisors are here to answer your questions.

Trade wanted.
Trade is an integral part of the growth of any country and for Canada, it’s central to the economy given its vast quantities of raw materials. It is also important in building stronger ties and cooperation with global neighbours outside of the trading arena. The common factor to all of these relationships is trust and when it’s lost, it difficult to get back. The year-long dispute between the U.S. and China entered another chapter with Chinese counter-tariffs in response to initial U.S. tariffs. Talks have been mediocre at best with no clear resolution in sight. However, there was good news for the USMCA Agreement, formerly NAFTA, in that steel and aluminum tariffs by the U.S. were lifted, removing a hurdle for eventual ratification by all three countries. Canada was directly affected by USMCA as its economy is slowing down; however, surprisingly robust economic data on GDP, inflation, and unemployment remained positive. Hopefully the existing trade disputes do not become a long, drawn out affair as in the end, no one wins.

Second wind.
There are different measures to assess in an economy. The obvious is GDP itself, but the employment indicator tells the health from the perspective of those working to keep the economic engine running. The latest labour report, after a breather in March, saw explosive growth in the number of hirings (more than ten times forecasted by analysts). With over 106,000 positions filled, the news gets better as most of the hirings were of a full-time nature, which provides strength to the labour market as it proves employers are thinking for the longer term. In addition, the unemployment rate declined to 5.7%, while the participation rate rose to 65.9%. Comparatively with our southern neighbours, they too have enjoyed the success of strong employment as its jobless rate fell to an almost 50-year low of 3.6%. After a great start to the year, the economy got its second wind in April; however, the Bank of Canada likely won’t be making any rate hikes anytime soon on this news as inflation remains benign and worries of trade and global growth persist.

Read the full May 2019 Market Insights. 

Read previous Market Insights:
April 2019
March 2019
February 2019

*The information contained in this report was obtained from sources believed to be reliable; however, we cannot guarantee that it is accurate or complete. This report is provided as a general source of information and should not be considered personal investment advice or solicitation to buy or sell any mutual funds and other securities.