Dec 10 2007 12:28PM | Permalink | Email this | Comments (0) |
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In the wake of the subprime mortgage crisis, many are calling the U.S. economy a house of cards on the verge of toppling. In a conversation with CanaData economist Alex Carrick, however, I was reminded that every economy risks collapse, but in general, because everyone has a vested interest in keeping the cards upright, a crash is unlikely.

Worry over the subprime crisis and the possibility of recession prompted the White House to announce a plan last week to help struggling subprime mortgage borrowers keep their homes in the wake of escalating mortgage rates.

While the plan calls for a five-year interest rate freeze, there are two catches. The plan is voluntary for mortgage lenders and only those homeowners not currently in arrears are eligible to participate. Borrowers who were coaxed into borrowing against the equity in their homes by “teaser” rat...Read More

Dec 4 2007 11:29AM | Permalink | Email this | Comments (1) |
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The Conference Board’s Consumer Confidence Index was release last week and the news is pretty much what market-watchers expected. Worried about their jobs and incomes, consumers reported the lowest levels of confidence in two years.

A slight decline in the Present Situation Index showed consumers have mixed feelings on the current conditions, while the larger drop in the Expectations Index revealed that consumers hold diminished expectations for the next six months.

Meanwhile, the Conference Board of Canada released its Consumer Confidence Index for November and the opinions of consumers north of the border vary greatly from their southern counterparts.

The Present Situation and Expectation Indices both rose, along with the amount of money each household expects to spend this Christmas season. Good news for retailers, who have been aggressively prom...Read More

Nov 28 2007 10:27AM | Permalink | Email this | Comments (0) |
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Canadian consumers continue to be optimistic on the whole, despite a slight dip in retail sales in September (after a healthy rise in August). This optimism should bode well for Canadian retailers during these last weeks before the holidays; however, Canadian consumers are also frustrated by the slow response by retailers to the stronger Canadian dollar.

Many Canadian shoppers are delaying their holiday shopping, in hope that the retailers still have more price reductions to come. If the retailers fail to meet consumer price expectations, the season should still be a healthy one, thanks to a booming Canadian economy, but it may not be the banner year it could have been.

(For more details about this week’s retail sales and consumer price index announcements please see the summaries below.)

Of course, retail sales and consumer confidence are closely ...Read More

Nov 21 2007 7:02AM | Permalink | Email this | Comments (0) |
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Recent statistics show Canadian and U.S. consumers continue to spend, so retailers such as Wal-Mart anticipate a happy, healthy holiday season.

However, the Conference Board’s October 30 report shows that U.S. consumer confidence has waned slightly. This means that the retailers’ optimism may a little premature, since there’s no guarantee that the subprime crisis doesn’t have some pain still to inflict on U.S. retail sales.

Chief economist Alex Carrick discusses three other factors besides consumer confidence that can have an effect on retail sales: the “wealth effect,” the “housing market effect” and the “Lower-valued U.S. dollar effect.”

U.S. re...Read More

Nov 15 2007 12:12PM | Permalink | Email this | Comments (1) |
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Both Canada and the U.S. released their international trade numbers on Friday, November 9. The headline news in Canada was the drop in the trade balance to its lowest level since December 1998. In the U.S., rising exports and lower imports resulted in a decrease in the goods and services deficit, when compared to the levels recorded in September 2006.

To understand the implications of international trade on the construction industry, check out this article from our archives by CanaData chief economist Alex Carrick — U.S. trade deficit stuck at $60 million per month — for more insights.

Canada’s trade balance with the world drops in September
With imports rising and exports declining, ...Read More