Weekly Economic Update

For the week of January 30 – February 5

GDP numbers for November will be released on Tuesday and are expected to have grown by 0.3%  on a month-over-month basis, compared to an equal drop of 0.3% in the month prior. Canadian Manufacturing PMI will be released today for January and will be following a posting of 51.8 in December.

We will see a bit more action out of the United States this week with releases expected for personal income and spending, Chicago purchasing manager, ADP employment change, ISM manufacturing, nonfarm payrolls, factory orders, and durable goods orders. To cap things off, the Fed is holding a policy meeting with their decision being released on Wednesday. Markets are generally expecting that the central bank will remain on hold, with the current implied probability of a rate hike sitting at 14.5%. However, as has been the case at the past few meetings, markets will be interested to hear updated commentary from Janet Yellen on the state of the United States economy now that Donald Trump is officially the president.

Donald Trump has signed an executive order banning immigrants and refugees from seven Muslim-majority countries for at least the next 90 days. This ordeal has led to mass confusion and anger throughout the world. Canada and others re-pledged their support to these countries while many multinational companies have ensured this would be a negative to business. The order left many individuals stranded in airports throughout the United States.

Oil prices are currently up by 0.21% and the Canadian dollar is flat against the US dollar.

Annualized GDP posted at 1.9% for the fourth quarter in the United States, significantly lower than the 2.2% that was expected, and the third quarter growth of 3.5 percent. Weakness in exports was a large factor in this decline and can be at least partly blamed on the recent strengthening in the US dollar. Imports increases as well as the US dollar had more purchasing power internationally. As has been the case for GDP lately, consumer spending continued to be the driving force for growth.

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