This announcement highlights a stark reversal in the trend line and came as the seven-day average for new cases rose sharply. Centers for Disease Control and Prevention recommended that vaccinated people mask up again in areas with high infection rates – a description that covers roughly two-thirds of all U.S. Although consumer and business confidence continued to climb throughout Q2, the highly contagious Delta variant has put that trend in jeopardy. The fast-spreading COVID-19 Delta variant poses the greatest risk to the nascent rebound, especially after vaccination rates plateaued in July. While the labour market and economy continue to display strength, challenges loom on the horizon. Payrolls expanded by an average of 600,000 a month during Q2 of 2021. Supply-chain shortages were the stumbling block as businesses wrestled with higher prices and stepped-up demand. Celebrations were toned down, however, because GDP had been forecast to rise by 8.5%. Growth was spurred by unprecedented levels of fiscal stimulus that fuelled consumer spending, which increased by 11.8% in June as economies reopened from prolonged lockdowns. ![]() GDP grew 6.5% in Q2, pushing the economy’s size past its pre-pandemic level. The world’s largest economy continued its rapid expansion. He seems ready to place a big bet that Canadians will help his Liberals regain a parliamentary majority thanks to a rebounding economy and Canada’s come-from-behind performance to capture a podium position in the global vaccination race. Prime Minister Justin Trudeau is signalling that he will trigger a snap election just two years after the last one. Investors have grown conservative amid concerns about the Delta variant and global supply-chain bottlenecks at the same time as the BoC is reducing stimulus measures. Since hitting a high of 1.68% back in March, the Canadian 10-year government bond yield has steadily retreated and now sits at 1.20%, down from 1.40% last month. WTI and WCS were flat at US$73.1 and US$58.7 per barrel, respectively. Energy declined sharply during the month, but consumer stocks made up a chunk of the difference. The S&P/TSX Composite was up 0.8% in July and posted an impressive 18.2% gain so far this year. Early numbers indicate that June GDP growth will be just shy of 1%, with retail sales and food services performing well as the broader economy reopens. Right now, it sits about 2% below the pre-pandemic level of February 2020. Canada’s GDP contracted 0.3% in May after a 0.5% decline in April. Pandemic lockdowns weighed on business activity. In July, the central bank scaled back its weekly rate of bond purchases and left the benchmark interest rate at 0.25%, where it will likely stay for at least the second half of 2021. The BoC is firmly committed to keeping inflation under control. In June, inflation fell to 3.1% from May’s 3.6%, supporting Bank of Canada (BoC) Governor Tiff Macklem’s view that rapid price increases will likely slow. They even provided some comic relief as Canada’s life-sized moose mascot and Australia’s kangaroo and emu mascots were briefly and mysteriously kidnapped.Ĭanada – Economic optimism plus athletic euphoria They delivered a nostalgic sense of wonder, national pride and international community that we feel together just once every four years (or five, this time around). equities performed well this month, while Chinese and Japanese equities faired poorly.ĭespite worries, the Summer Games played out successfully. Sportsmanship – the Italian and Qatari high jumpers opted to share a gold medal in the same spirit as countries and scientists came together to develop, produce and ship billions of vaccine doses. and China, also had the two highest medal tallies.Ĭo-operation – any team trying to succeed must make sacrifices just as Democrats and Republicans compromised to pass a bipartisan infrastructure bill. The comparisons don’t stop there:Ĭompetition – the world’s two largest economies and political rivals, the U.S. And, like many of us, some elite athletes publicly struggled with mental health. A few were barred for violating COVID-19 protocols. COVID-19 infections forced athletes to drop out. The Games were a microcosm of our global environment. After a year’s delay, w ould they still go ahead while Japan was in a state of emergency? Would spectators be allowed? Would they be a super-spreader event? Much like the pandemic, the Games were shrouded in uncertainty. On July 23, 2021, the cauldron flame of the 2020 Summer Olympics was finally lit in Tokyo. Douglas Porter, Chief Economist, BMO Financial Group ![]() “After a blazing start to the global recovery, it is becoming increasingly apparent that the last mile will be the toughest due to supply challenges and the spread of the Delta variant.”
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