National Unemployment in Canada hit a low of 5.9%, with a wide disparity across the country.
High hydro costs in Ontario do not attract new manufacturers and are causing current business owners to consider moving. There’s a lot to be said for generating your own power, get off of the grid as Toyota has done.
Kitchener and Waterloo are hubs of technical development. New hi-rises are going up in downtown Kit. Old manufacturing bldgs. are being renovated for start ups, what was old is new again! It’s not industry creating jobs, it’s the technological revolution. Software and Apps are in, manufacturing is out!
Tech heavy employers, the CMH hospital project, the ION installation, and surging housing create employment, we need the government to act responsibly to create worthy jobs through new infrastructure projects.
The low Can. Dollar continues to help adding jobs to those who are exporters, one bright light on the economic front.
The unemployment rate in the USA is at a 17-year low. That fact tells us that the USA economy is firing on all cylinders, and you know that Donald Trump will take all the credit.
For 2018, I expect the unemployment rate will vary between 5.6% and 6.4%.
For your answer, please use only one number after the decimal point.
Markets started to move up in January 2017 with a surge in the price of precious metals.
Markets in 2017 were up 24% in the USA and for Canada a moderate 5%. Markets give an indication of where the economy is headed. Manufacturers buy machinery to meet demand, demand creates jobs, and paychecks creating a healthy economy.
The markets continue to set new highs, uncharted territory. There are naysayers who see them overvalued, and then there are those who see rising earnings by the majority of companies and see a continued rise in the market valuation.
Personally, I expect the TSX to be higher in one year, with a gain of 8 to 10% in Canada. Being in the 13,000 to 17,800 area.
Scoring System for Prognostications: Score Sheet/Add Your Name Pls.
Just to remind you of the scoring system, and for the benefit of those new to “Prognostications”.
Five Values: Rate of Inflation, Value of Can. $, Over-night Bank Rate, Housing Starts, and Unemployment Rate,
I provide guidelines and your duty is to enter the value that you forecast for each of the five criteria.
Those with the answer closest to the actual value for each of the five items receives 6 pts.
Those second closest to the actual receives 5 Pts.
And it continues with points of 4, 3, 2, and 1 being awarded.
Essentially, each of you has a chance of earning at least one or two points, if you’re paying attention or 30 points in total.
The points for each entrant are totalled and a winner is declared.
There is no cost to enter and I will donate a book to the Top Prognosticator.
Estimating the closing value of the TSX is a separate contest, and requires a contribution of $10.00, with 1/2 to the winner and 1/2 to the Rotary Club.
Published values are taken from the Royal Bank Website, dated Dec. 21st/ 2017. The value of the Canadian Dollar comes from the Globe and Mail ROB on December 30st. as does the closing value of the TSX. These are posted for all to see
Rate of Inflation: 1.6% in 2017
Inflation has been “Missing in action” remaining below 2% and has everyone wondering why? RBC sees a disconnect from strong economic growth, tightening labour markets, and rising prices, complicating the outlook for monetary policy.
The Bank of Canada hiked rates in July and Sept of 2017 and is now monitoring the landscape, expecting to hold inflation within the targeted 2% guideline.
Oil prices are rising at slowly and have just moved into the $60 range. The price of oil will likely continue to climb in 2018.
Food prices are under pressure due to Amazon’s entry into the playing field but forecasters expect a 4 -5% increase for those who like to dine out or eat prepared foods, many folks just don’t cook anymore, as you will notice if you shop at Farm-Boy. I was surprised to learn that Walmart sells 20% of all USA groceries.
Utilities rates continue to rise at 5% year in on-going expenses to provide clean water. We can’t live without it!
Hydro rates keep rising with the Ontario’s Green Energy give-a–way. Ontario has the highest energy rates in Canada. Energy prices are billed monthly to overcome bill-shock and Premier Kathleen is borrowing money to give you and I a false sense of how the file is being managed, and our children another future debt to pay! Green energy is expensive. There’s a need for conventional back-up for the days the wind does not blow and the sun doesn’t shine. We pay double for Green Energy.
Governments just can’t stop spending to get themselves re-elected and we slide ever deeper into debt.
Governments advise that our debt is a manageable percentage of GDP, but in reality, as we pay more to service the debt in years to come, there will be less money to do what needs to be done. Ergo, higher taxation is in your future and your children and grandchildren will one day rue the profligacy of our generation.
For all the challenges, inflation will likely rise in 2018, albeit modestly.
RBC sees Inflation in the 2% range.
Pick a number between 1.75 and 2.75.
The Canadian Dollar. $.79 on Dec. 29/17
The Canadian dollar is where it should be for our exporters, the ones who create employment.
Oil is in excess supply in western Canada, but for Quebec’s reluctance to provide a pipeline to pass thru their pied-de-Terre, refineries on the East coast import oil from the middle east.
Is this any way to run a country?
Something as important as our national economy is a matter for the Federal government to handle, NOT the provinces.
I will give Mr. Trudeau credit for sanctioning the Kinder-Morgan pipeline to be doubled in size, and giving the go-ahead for Enbridge’s line 9; but it will be years before Canada realizes increased exports. Not much hope here for the dollar 2017.
Commodities are on the rise, copper, zinc, aluminum, and other similar items. Canada needs to process more of what it digs out of the ground!
The USA raised the Fed rate 0.25% on DEC. 13, 2017 to a range of 1.25 to 1.5% on the back of strong labour markets and solid economic growth. The American dollar is more attractive to investors and the Fed rate is forecast to rise to 2% in 2018.
As usual it’s not that the Canadian dollar that’s weak, it’s the US $ that’s strong.
Economists do not foresee any significant condition that will lift the Can. Dollar in 2018.
RBC sees the Can $ range bound from $0.75 to $0.80. Pick a number between$ 0.75 and $0.80.
Overnight Bank Rate: (1.0% in 2017)
Interest rates in Canada will rise in 2018, the economy is strong, companies are reporting rising earnings, employment is rising, all strong signals.
Borrowers have never had it so good for so long!
The question is not will the bank rate go up but by how much?
Employment is rising in North America, even though the outlook for Nafta is in doubt. In a situation like this, we have to look for the good and if we look for it we will find it.
Interest rate adjustments are the only lever the government has to either stimulate the economy, or to apply the brakes to an overheated inflationary situation.
It takes 12 to 18 months for a rate change to affect the economy, it’s not an effective economic lever unless rates are raised too much and too quickly.
Conversely, with the USA raising their rate, this will strengthen the US dollar and weaken the Can. Dollar and that is favourable to Canada’s exporters unless something drastic happens to Nafta.
Overnight Interest Rates one year from will be Higher than 1.0%
What is your best estimate of the year end rate?
RBC sees the bank rate rising 2 to 3 times in 2018 with interest rates being in a range from 1.50% to 1.75%.
Housing Starts: (2017 –219,000)
Last year, I stated that Housing starts will be under pressure in 2017. History tells me that I was on the wrong side of the equation last year as they have risen exponentially. What this fact really means, is that you should have no faith in what I prognosticate.
Mortgage rates have risen slightly but by historical standards, over-extended mortgage holders are living on the edge, knowing that rates will only go up in the coming year.
The government has enacted new stress tests for those seeking a mortgage from a bank. Borrowers will now have to be able to cover a mortgage with a 2% higher interest rate than the current rate. I defer to Paul Cody for the exact details, but this will likely turn borrowers to the Credit Unions with relaxed mortgage rules and higher interest rates!
Government intervention is all about lessening the potential hit to the banking industry if a serious default occurred in the housing mortgage market. It happened in the USA not so long ago.
Housing starts are literally booming with high-rises popping up along the LRT line, in Cambridge, in Hespeler and across the country. If you have travelled to Europe, you see very few single-family dwellings on large plots of land. It’s a changing landscape here in downtown Canada.
RBC sees housing being in the area of 195,000 starts.
Unemployment Rate: 6.4% in 2017
National Unemployment in Canada hit a low of 5.9%, with a wide disparity across the country.
Part-time jobs continue to grow compared to full time employment. While the UR is @ 56.4% year over year, the reliability of the jobs available is not secure. Governments have enacted legislation with respect to wages, holiday pay entitlements, leaves of absence and other practices that are causing small employers to reconsider their reason to be in business.
High hydro costs in Ontario do not attract new manufacturers and are causing current business owners to consider moving. There’s a lot to be said for generating your own power, get off of the grid as Toyota has done.
Kitchener and Waterloo are hubs of technical development. New hi-rises are going up in downtown Kit. Old manufacturing bldgs. are being renovated for start ups, what was old is new again! It’s not industry creating jobs, it’s the technological revolution. Software and Apps are in, manufacturing is out!
Tech heavy employers, the CMH hospital project, the ION installation, and surging housing create employment, we need the government to act responsibly to create worthy jobs through new infrastructure projects.
The low Can. Dollar continues to help adding jobs to those who are exporters, one bright light on the economic front.
The unemployment rate in the USA is at a 17-year low. That fact tells us that the USA economy is firing on all cylinders, and you know that Donald Trump will take all the credit.
For 2018, I expect the unemployment rate will vary between 5.6% and 6.4%.
For your answer, please use only one number after the decimal point.
RBC % sees Unemployment in the 6% area.
The Toronto Stock Exchange: Dec. 29/2017: 16,209
Markets started to move up in January 2017 with a surge in the price of precious metals.
Markets in 2017 were up 24% in the USA and for Canada a moderate 5%. Markets give an indication of where the economy is headed. Manufacturers buy machinery to meet demand, demand creates jobs, and paychecks creating a healthy economy.
The markets continue to set new highs, uncharted territory. There are naysayers who see them overvalued, and then there are those who see rising earnings by the majority of companies and see a continued rise in the market valuation.
Personally, I expect the TSX to be higher in one year, with a gain of 8 to 10% in Canada. Being in the 13,000 to 17,800 area.
Please print your full name on the form, if you`re in the TSX contest, attach a $10.00 bill to your form with a paper clip and return to me.
2017 will be the best year of your life, I look forward to learning of your forecasts and to be here in 2019, the good Lord willing!
Scoring System for Prognostications: Score Sheet/Add Your Name Pls.
Just to remind you of the scoring system, and for the benefit of those new to “Prognostications”.
Five Values: Rate of Inflation, Value of Can. $, Over-night Bank Rate, Housing Starts, and Unemployment Rate,
I provide guidelines and your duty is to enter the value that you forecast for each of the five criteria.
Those with the answer closest to the actual value for each of the five items receives 6 pts.
Those second closest to the actual receives 5 Pts.
And it continues with points of 4, 3, 2, and 1 being awarded.
Essentially, each of you has a chance of earning at least one or two points, if you’re paying attention or 30 points in total.
The points for each entrant are totalled and a winner is declared.
There is no cost to enter and I will donate a book to the Top Prognosticator.
Estimating the closing value of the TSX is a separate contest, and requires a contribution of $10.00, with 1/2 to the winner and 1/2 to the Rotary Club.
Published values are taken from the Royal Bank Website, dated Dec. 21st/ 2017. The value of the Canadian Dollar comes from the Globe and Mail ROB on December 30st. as does the closing value of the TSX. These are posted for all to see
Rate of Inflation: 1.6% in 2017
Inflation has been “Missing in action” remaining below 2% and has everyone wondering why? RBC sees a disconnect from strong economic growth, tightening labour markets, and rising prices, complicating the outlook for monetary policy.
The Bank of Canada hiked rates in July and Sept of 2017 and is now monitoring the landscape, expecting to hold inflation within the targeted 2% guideline.
Oil prices are rising at slowly and have just moved into the $60 range. The price of oil will likely continue to climb in 2018.
Food prices are under pressure due to Amazon’s entry into the playing field but forecasters expect a 4 -5% increase for those who like to dine out or eat prepared foods, many folks just don’t cook anymore, as you will notice if you shop at Farm-Boy. I was surprised to learn that Walmart sells 20% of all USA groceries.
Utilities rates continue to rise at 5% year in on-going expenses to provide clean water. We can’t live without it!
Hydro rates keep rising with the Ontario’s Green Energy give-a–way. Ontario has the highest energy rates in Canada. Energy prices are billed monthly to overcome bill-shock and Premier Kathleen is borrowing money to give you and I a false sense of how the file is being managed, and our children another future debt to pay! Green energy is expensive. There’s a need for conventional back-up for the days the wind does not blow and the sun doesn’t shine. We pay double for Green Energy.
Governments just can’t stop spending to get themselves re-elected and we slide ever deeper into debt.
Governments advise that our debt is a manageable percentage of GDP, but in reality, as we pay more to service the debt in years to come, there will be less money to do what needs to be done. Ergo, higher taxation is in your future and your children and grandchildren will one day rue the profligacy of our generation.
For all the challenges, inflation will likely rise in 2018, albeit modestly.
RBC sees Inflation in the 2% range.
Pick a number between 1.75 and 2.75.
The Canadian Dollar. $.79 on Dec. 29/17
The Canadian dollar is where it should be for our exporters, the ones who create employment.
Oil is in excess supply in western Canada, but for Quebec’s reluctance to provide a pipeline to pass thru their pied-de-Terre, refineries on the East coast import oil from the middle east.
Is this any way to run a country?
Something as important as our national economy is a matter for the Federal government to handle, NOT the provinces.
I will give Mr. Trudeau credit for sanctioning the Kinder-Morgan pipeline to be doubled in size, and giving the go-ahead for Enbridge’s line 9; but it will be years before Canada realizes increased exports. Not much hope here for the dollar 2017.
Commodities are on the rise, copper, zinc, aluminum, and other similar items. Canada needs to process more of what it digs out of the ground!
The USA raised the Fed rate 0.25% on DEC. 13, 2017 to a range of 1.25 to 1.5% on the back of strong labour markets and solid economic growth. The American dollar is more attractive to investors and the Fed rate is forecast to rise to 2% in 2018.
As usual it’s not that the Canadian dollar that’s weak, it’s the US $ that’s strong.
Economists do not foresee any significant condition that will lift the Can. Dollar in 2018.
RBC sees the Can $ range bound from $0.75 to $0.80. Pick a number between$ 0.75 and $0.80.
Overnight Bank Rate: (1.0% in 2017)
Interest rates in Canada will rise in 2018, the economy is strong, companies are reporting rising earnings, employment is rising, all strong signals.
Borrowers have never had it so good for so long!
The question is not will the bank rate go up but by how much?
Employment is rising in North America, even though the outlook for Nafta is in doubt. In a situation like this, we have to look for the good and if we look for it we will find it.
Interest rate adjustments are the only lever the government has to either stimulate the economy, or to apply the brakes to an overheated inflationary situation.
It takes 12 to 18 months for a rate change to affect the economy, it’s not an effective economic lever unless rates are raised too much and too quickly.
Conversely, with the USA raising their rate, this will strengthen the US dollar and weaken the Can. Dollar and that is favourable to Canada’s exporters unless something drastic happens to Nafta.
Overnight Interest Rates one year from will be Higher than 1.0%
What is your best estimate of the year end rate?
RBC sees the bank rate rising 2 to 3 times in 2018 with interest rates being in a range from 1.50% to 1.75%.
Housing Starts: (2017 –219,000)
Last year, I stated that Housing starts will be under pressure in 2017. History tells me that I was on the wrong side of the equation last year as they have risen exponentially. What this fact really means, is that you should have no faith in what I prognosticate.
Mortgage rates have risen slightly but by historical standards, over-extended mortgage holders are living on the edge, knowing that rates will only go up in the coming year.
The government has enacted new stress tests for those seeking a mortgage from a bank. Borrowers will now have to be able to cover a mortgage with a 2% higher interest rate than the current rate. I defer to Paul Cody for the exact details, but this will likely turn borrowers to the Credit Unions with relaxed mortgage rules and higher interest rates!
Government intervention is all about lessening the potential hit to the banking industry if a serious default occurred in the housing mortgage market. It happened in the USA not so long ago.
Housing starts are literally booming with high-rises popping up along the LRT line, in Cambridge, in Hespeler and across the country. If you have travelled to Europe, you see very few single-family dwellings on large plots of land. It’s a changing landscape here in downtown Canada.
RBC sees housing being in the area of 195,000 starts.
Unemployment Rate: 6.4% in 2017
National Unemployment in Canada hit a low of 5.9%, with a wide disparity across the country.
Part-time jobs continue to grow compared to full time employment. While the UR is @ 56.4% year over year, the reliability of the jobs available is not secure. Governments have enacted legislation with respect to wages, holiday pay entitlements, leaves of absence and other practices that are causing small employers to reconsider their reason to be in business.
High hydro costs in Ontario do not attract new manufacturers and are causing current business owners to consider moving. There’s a lot to be said for generating your own power, get off of the grid as Toyota has done.
Kitchener and Waterloo are hubs of technical development. New hi-rises are going up in downtown Kit. Old manufacturing bldgs. are being renovated for start ups, what was old is new again! It’s not industry creating jobs, it’s the technological revolution. Software and Apps are in, manufacturing is out!
Tech heavy employers, the CMH hospital project, the ION installation, and surging housing create employment, we need the government to act responsibly to create worthy jobs through new infrastructure projects.
The low Can. Dollar continues to help adding jobs to those who are exporters, one bright light on the economic front.
The unemployment rate in the USA is at a 17-year low. That fact tells us that the USA economy is firing on all cylinders, and you know that Donald Trump will take all the credit.
For 2018, I expect the unemployment rate will vary between 5.6% and 6.4%.
For your answer, please use only one number after the decimal point.
RBC % sees Unemployment in the 6% area.
The Toronto Stock Exchange: Dec. 29/2017: 16,209
Markets started to move up in January 2017 with a surge in the price of precious metals.
Markets in 2017 were up 24% in the USA and for Canada a moderate 5%. Markets give an indication of where the economy is headed. Manufacturers buy machinery to meet demand, demand creates jobs, and paychecks creating a healthy economy.
The markets continue to set new highs, uncharted territory. There are naysayers who see them overvalued, and then there are those who see rising earnings by the majority of companies and see a continued rise in the market valuation.
Personally, I expect the TSX to be higher in one year, with a gain of 8 to 10% in Canada. Being in the 13,000 to 17,800 area.
Please print your full name on the form, if you`re in the TSX contest, attach a $10.00 bill to your form with a paper clip and return to me.
2017 will be the best year of your life, I look forward to learning of your forecasts and to be here in 2019, the good Lord willing!
