Katie Keir
Looking ahead to the release of May GDP data next week, CIBC Capital Markets economist Royce Mendes has released a report that looks at the role residential investment is currently playing in Canada’s growth.
Since “residential investment now accounts for a larger share of the economy than business investment,” he said in the report, that’s leading to questions about whether the end of a housing boom will pose serious concerns.
Typically, both measures are correlated, but businesses have been cautious on investment during the pandemic.
Residential investment takes into account housing construction, renovation and ownership transfer costs, Mendes explained. So, “It’s not a measure of home prices and doesn’t say anything about the affordability or financial stability issues that have come with the surge in home prices during the pandemic.”
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The dollar fell on Friday after US nonfarm payrolls data showed hiring increased in May as the pandemic eased, but not as much as expected, tempering expectations the Federal Reserve will tighten monetary policy sooner, rather than later.
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The US dollar fell on Friday after US nonfarm payrolls data showed hiring increased last month as the COVID-19 pandemic eased, but not as much as expected, tempering expectations the US Federal Reserve would tighten monetary policy sooner, rather than later.
Nonfarm payrolls increased by a solid 559,000 jobs last month, helped by higher COVID-19 vaccination rates, but that was below the consensus forecast of 650,000 more jobs.
“This payroll number was a little disappointing,” Oanda Corp senior market analyst Edward Moya said.
The softer-than-expected report means that there is no urgency for the Fed to begin tapering its monthly purchase of US$120