Mann at Work

May 30 2007 1:22PM | Permalink | Email this | Comments (0) |
Blog This! using: Blogger.com | |

Many Bank of Canada watchers got what they expected today — no change in the bank’s overnight rate, but a warning that the bank is prepared to raise the rate at its next scheduled announcement in July. Meanwhile, the U.S. Consumer Confidence outlook for the next six months can best be described as “cautious.” The board’s director, Lynn Franco, says that the confidence levels “suggest growth…at a slow pace.”

You’ll find more details on today’s announcements below. As always, please feel free to add your comments on the day’s news by clicking on the “Comments” link above.

Elsewhere on BuildingTeamForecast, Jim Haughey says that the value of office starts doubled in first-quarter 2007 from last fall. The surge continued through April of this year. Starts were 71% higher than in April of last year. While the 71% figure appears to be a sharp spike in office starts, they will not continue at this level for long.

Bank of Canada keeps key rate steady at 4.25%
May 29, 2007 – The Bank of Canada left its key overnight rate unchanged at 4.25% today, but warned it is prepared to raise overnight interest rates as early as its next scheduled announcement date on July 10, 2007.

The Bank now judges that there is somewhat greater excess demand in the economy than was thought to be the case in April.

Information gathered since the Bank’s April Monetary Policy Report (MPR) indicates that economic growth and inflation in Canada in the first part of this year have been stronger than the Bank was expecting. The Canadian economy appears to have grown at an annual rate of about 3.5% in the first quarter of this year, a full 1.0% higher than was estimated in the April MPR.

Conference Board Consumer Confidence Index Improves
May 29, 2007 – The Conference Board Consumer Confidence Index rebounded in May. Lynn Franco, Director of The Conference Board Consumer Research Center, said in the Board’s news release today that "The bounce-back in confidence was due primarily to a more upbeat assessment of present-day business conditions. All in all, confidence levels continue to suggest growth, albeit at a slow pace."

The outlook for the next six months remains cautious. Consumers anticipating business conditions to improve increased to 15.1 percent from 13.8 percent. Consumers expecting business conditions to worsen, however, edged up to 10.1 percent from 9.7 percent.