The latest headlines tell us that the inflation rate rose up
a notch in February due to higher gas and food prices. Core inflation – the
underlying pressure on consumer goods, excluding volatile items such as energy
and fresh foods – rose two notches to 2.3 per cent, above the Bank of Canada’s
2-per-cent target line.
The Canadian dollar
is down 0.39 of a cent to 100.7 cents US. because prices for commodities are
down.
Payroll is only slightly outpacing the inflation rate but employment
rates are improving.
The spring housing market
is heating up; house prices are balancing out except in sweltering hot cities
like Toronto and Vancouver.
And the Bank of Canada may raise the prime lending rate
later this year.
What does it all mean?
The economy is getting back to normal.
Since the U.S. housing downturn in 2007 most economic news
worldwide has been negative, as one economist said recently, punctuated with terms
such as “economic crisis”, “ roller-coaster markets”, “financial panic,” and “heightened level of
uncertainty”.
If we take a snapshot of the world
today we find that equity markets have calmed down – the stock exchanges are up
and down but the volatility has eased.
The European crisis is still a mess but
pressure has eased a down a bit.
The U.S. economy is improving and the Federal
Reserve is much more upbeat with its reports.
In Canada, the economic waters have
calmed considerably. We probably won’t see a housing bubble burst; the West is booming
again and interest rates are going to rise later this year or in early 2013.
The big news coming out of Ottawa is
not about staving off financial ruin but the same old stuff like fighting
deficits, battles over health care transfers, trade issues and some controversies
like robocalls.
Pretty much back to normal!
Great!
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