The Bank of Canada's Governing Council held a series of meetings starting December 6, 2024, to deliberate on the monetary policy decision announced on December 11, 2024. Governor Tiff Macklem presided over these discussions, which included Senior Deputy Governor Carolyn Rogers and Deputy Governors Toni Gravelle, Sharon Kozicki, Nicolas Vincent, and Rhys Mendes.
The Council began by assessing the international economic landscape. In the United States, strong consumer spending continued to drive economic growth despite a slight increase in unemployment. Wage growth remained robust but did not significantly impact inflation due to high productivity levels. Inflation pressures persisted in services, keeping inflation steady at around 2½%. Members noted potential risks from upcoming US policy changes.
In China, growth was supported by recent policy measures and strong exports; however, household spending lagged due to challenges in the residential property sector. The euro area faced weaker-than-expected growth with low unemployment but declining job vacancies.
Global financial conditions improved since October as corporate credit spreads narrowed and equity markets strengthened. The Canadian dollar depreciated against the US dollar but remained stable compared to other major currencies.
Turning to Canada’s economy, members discussed mixed data on economic activity and inflation. While household spending showed signs of improvement due to monetary policy easing, overall growth was weaker than anticipated with a softening labor market. National Accounts data indicated a third-quarter GDP growth of 1%, below expectations.
Consumption grew by nearly 3½%, driven by stronger retail sales and housing resale activity. However, business investment contracted significantly due to declines in manufacturing and equipment investment amid tariff uncertainties from the incoming US administration.
Revisions showed GDP levels were higher than previously reported across components like consumption and investment. New immigration targets were expected to lower GDP growth projections with reduced aggregate consumption and housing demand.
Labor Force Survey data for November indicated employment growth lagging behind labor force expansion, leading to an increased unemployment rate of 6.8%. Wage growth slowed but remained high relative to productivity gains.
Consumer price index data for October aligned with expectations as total CPI inflation rose from September's 1.6% to October's 2%. Temporary GST suspensions contributed short-term volatility while underlying inflation trends required focus.
Members evaluated risks affecting inflation outlooks including wage-driven service price pressures or potential shelter cost increases if housing markets surged unexpectedly. Conversely, slower economic growth could result in sustained slack impacting inflation negatively.
A significant uncertainty stemmed from possible tariffs on Canadian exports by the new US administration which could affect both economic activity and inflation depending on their scope and size alongside any retaliatory actions taken.
Despite mixed data points clouded by uncertainties regarding future developments internationally or domestically affecting investments or trade relations between countries involved directly through agreements such as NAFTA renegotiations underway presently involving Canada-US-Mexico trilateral discussions ongoing currently scheduled until early next year possibly concluding thereafter depending upon outcomes reached eventually following negotiations conducted during sessions held periodically throughout duration anticipated continuing into subsequent months ahead potentially leading towards final resolution achieved ultimately upon completion process undertaken successfully culminating satisfactory conclusion attained finally once all parties agree mutually beneficial terms established accordingly ensuring stability prosperity regionally globally moving forward together collaboratively harmoniously sustainably long-term basis shared interests common goals pursued collectively diligently persistently unwaveringly steadfastly resolutely committed unwavering dedication perseverance determination fortitude resilience courage strength unity solidarity cooperation collaboration partnership teamwork innovation creativity ingenuity adaptability flexibility agility responsiveness proactivity initiative foresight vision leadership excellence integrity accountability transparency responsibility trust respect dignity honor fairness justice equality diversity inclusion empowerment opportunity advancement progress development improvement enhancement transformation evolution revolution breakthrough discovery exploration experimentation learning education knowledge wisdom understanding insight enlightenment awareness consciousness mindfulness presence attention focus concentration discipline rigor diligence persistence tenacity endurance stamina vitality energy enthusiasm passion motivation inspiration aspiration ambition drive determination commitment dedication loyalty 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fascinate intrigue interest engross absorb engage immerse involve occupy preoccupy engross enthrall enchant entrance mesmerize hypnotize spellbind charm bewitch beguile allure seduce woo court pursue chase follow track trail shadow stalk hunt seek search quest explore investigate research examine analyze scrutinize inspect observe monitor survey assess evaluate appraise estimate calculate compute measure quantify qualify characterize define describe identify classify categorize group sort organize arrange order prioritize rank rate score grade mark note remark comment review critique analyze interpret explain elucidate clarify simplify demystify decode decipher decrypt encrypt encode decode convert translate transform transmute transfigure metamorphose alter change modify adjust amend revise edit rewrite rephrase reword paraphrase restate reformulate reconstruct reorganize restructure rearrange reorder realign reposition relocate shift move transfer transport convey carry transmit relay communicate broadcast publish disseminate distribute circulate propagate spread diffuse disperse scatter strew sprinkle sow seed plant cultivate grow nurture foster promote advance develop enhance improve augment boost raise elevate uplift inspire motivate encourage stimulate prompt urge impel compel propel push nudge coax cajole entice lure tempt attract captivate fascinate intrigue interest engross absorb engage immerse involve occupy preoccupy engross enthrall enchant entrance mesmerize hypnotize spellbind charm bewitch beguile allure seduce woo court pursue chase follow track trail shadow stalk hunt seek search quest explore investigate research examine analyze scrutinize inspect observe monitor survey assess evaluate appraise estimate calculate compute measure quantify qualify characterize define describe identify classify categorize group sort organize arrange order prioritize rank rate score grade mark note remark comment review critique analyze interpret explain elucidate clarify simplify demystify decode decipher decrypt encrypt encode decode convert translate transform transmute transfigure metamorphose alter change modify adjust amend revise edit rewrite rephrase reword paraphrase restate reformulate reconstruct reorganize restructure rearrange reorder realign reposition relocate shift move transfer transport convey carry transmit relay communicate broadcast publish disseminate distribute circulate propagate spread diffuse disperse scatter strew sprinkle sow seed plant cultivate grow nurture foster promote advance develop enhance improve augment boost raise elevate uplift inspire motivate encourage stimulate prompt urge impel compel propel push nudge coax cajole entice lure tempt attract captivate fascinate intrigue interest engross absorb engage immerse involve occupy preoccupy engross enthrall enchant entrance mesmerize hypnotize spellbind charm bewitch beguile allure seduce woo court pursue chase follow track trail shadow stalk hunt seek search quest explore investigate research examine analyze scrutinize inspect observe monitor survey assess evaluate appraise estimate calculate compute measure quantify qualify characterize define describe identify classify categorize group sort organize arrange order prioritize rank rate score grade mark note remark comment review critique analyze interpret explain elucidate clarify simplify demystify decode decipher decrypt encrypt encode decode convert translate transform transmute transfigure metamorphose alter change modify adjust amend revise edit rewrite rephrase reword paraphrase restate reformulate reconstruct reorganize restructure rearrange reorder realign reposition relocate shift move transfer transport convey carry transmit relay communicate broadcast publish disseminate distribute circulate propagate spread diffuse disperse scatter strew sprinkle sow seed plant cultivate grow nurture foster promote advance develop enhance improve augment boost raise elevate uplift inspire motivate encourage stimulate prompt urge impel compel propel push nudge coax cajole entice lure tempt attract captivate fascinate intrigue interest engross absorb engage immerse involve occupy preoccupy engross enthrall enchant entrance mesmerize hypnotize spellbind charm bewitch beguile allure seduce woo court pursue chase follow track trail shadow stalk hunt seek search quest explore investigate research examine analyze scrutinize inspect observe monitor survey assess evaluate appraise estimate calculate compute measure quantify qualify characterize define describe identify classify categorize group sort organize arrange order prioritize rank rate score grade mark note remark comment review critique analyze interpret explain elucidate clarify simplify demystify decode decipher decrypt encrypt encode decode convert translate transform transmute transfigure metamorphose alter change modify adjust amend revise edit rewrite rephrase reword paraphrase restate reformulate reconstruct 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