A Framework That Provides Clarity

During periods of “low visibility,” confusion reigns: for every indication of one trend, there seems to be a countertrend. The key is to glean from the collective wisdom of reliable leading indicators a clear signal that the economy is headed for a turn.

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Nov 06 2013

Canada Allows for Rate Cut Amid Slowing Growth

ECRI has just updated its Canadian Long Leading Index (CALLI). The value of this index lies in its ability to anticipate cyclical turns in the economy before conventional leading indexes.

Last month, the Bank of Canada (BoC) backed off its stance that its next rate adjustment would be upward, a position the BoC has held since April 2012, instead adopting a neutral stance. This shift, opening the window for a rate cut, was underscored by the BoC also reducing its growth forecast into next year, noting that business investment and exports have disappointed.

ECRI’s latest update to the CALLI provides insight into the trajectory of Canadian economic growth, indicating whether a decline in the Canadian economy may vindicate the BoC’s adjustments.

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