Housing weakness expected to be a drag on growth

Financial Post- Canada’s housing market helped lift the economy in the early part of the recovery but will now act as a drag on growth, with starts falling for two straight quarters and expected to continue to fall in the months ahead, economists say.

Canada Mortgage and Housing reported Friday housing starts declined 1.5 per cent in September from the previous month, bringing the seasonally adjusted annual rate to 186,400 units in September.

Analysts had called for a bigger drop in starts, to 179,000.

Starts have now fallen for four of the past five months, leading to two straight quarters of overcall declines.

"After helping to support the rebound in real GDP growth over the last year, residential investment is likely to be a drag on economic growth through the second half of this year," said Diana Petramala, an economist at TD Economics…

Housing weakness expected to be a drag on growth

Bank of Canada poised to raise interest rates

The Globe and Mail- Mark Carney is likely to raise borrowing costs for the second straight time Tuesday, while continuing to sound a cautious tone as belt-tightening in Europe, efforts to restrain China’s growth, and plunging consumer confidence in the U.S. cast a pall over Canada’s prospects.

All 12 primary securities dealers and most economists say the central-bank governor will lift his main interest rate by another 25 basis points, to 0.75 per cent. The labour market has recouped most of the jobs lost during the recession and companies are seeing better demand, suggesting the private sector will be able to lead economic growth after federal and provincial stimulus largesse runs out later this year.

Investors are less confident about later decisions, and that may not change this week because Mr. Carney is likely to reiterate that his path to a more neutral, pre-crisis policy stance depends on the developing economic stories around the world…

Bank of Canada poised to raise interest rates – The Globe and Mail

Carney’s dollar dilemma

 Globe and Mail – By ratcheting interest rates lower to stimulate economic growth, the Bank of Canada has cleared the way for mortgage rates that remain at historically cheap …

Carney’s dollar dilemma – The Globe and Mail

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