Around the World – Week of August 8th Update

Author: Portfolio Specialist Group

August 8, 2017

“A recap of last week’s top economic news and what’s to come”

Weekly Market Review


  • Canadian employment slowed in July with 10,900 jobs added during the month. Positively, full-time jobs supported the gain, adding over 35,000 positions, while part-time employment fell by 24,000. Wage growth was also steady at 1.3%
  • Regionally, five of 10 provinces reported net gains, with Ontario’s 25,500 new positions leading the way. Manitoba and Quebec also had a strong month, while Alberta fared worst with a loss of more than 14,000 jobs.
  • With fewer Canadians seeking work, the unemployment rate dipped to 6.3%, from 6.5% previously, and the lowest level since October 2008.


  • Employment in the U.S. continues to strengthen as July’s nonfarm payrolls grew by 209,000, beating expectations. A large majority of the gain came from hiring in the services sector, as the goods sector slowed during the month.
  • Average hourly earnings rose 0.3%, holding the annualized rate at 2.5% for the fourth straight month. Aggregate hours worked also grew 0.2% in the month, up 1.8% annualized.
  • The unemployment rate returned to a cycle-low of 4.3%. This improvement came despite a slight pickup in the participation rate.


  • Economic data in the eurozone strengthened as second quarter GDP growth of 0.6% matched expectations. This brought the annualized pace to 2.1%, from 1.9% in the prior quarter, its best level in five years.
  • July’s inflation held at 1.3%, though core inflation moved up slightly to 1.2%, which is the highest level since 2013.
  • In a separate release, the eurozone’s unemployment rate improved to an eight-year low of 9.1%. Within the region, jobless rates fell in Italy and Spain, two countries with the highest unemployment, and Germany’s unemployment fell to 5.7%, a post-unification low.


  • The U.S. ISM Manufacturing PMI fell 1.5 points to 56.3, though the six-month average is still at its highest level since 2014. The ISM Non-Manufacturing Index fell 3.5 points to 53.9, however, suffering its biggest decline since 2008. Eurozone activity was revised down by 0.2 to 56.6, though like the U.S., remains well within expansionary territory. In China, the Caixin Manufacturing PMI added 0.7 points, to 51.1.
  • Following hawkish comments made in the last few weeks, the Bank of England ultimately held interest rates unchanged in a vote of 6-2 among policymakers. Forecasts for economic growth were revised lower to 1.7% in 2017, from 1.9% and 1.6% in 2018, from 1.7%. Despite elevated inflation levels still above target, the “element of Brexit uncertainty” is clearly weighing on the central bank’s agenda. The sterling fell to a nine-month low on the news.

What’s to come


  • An update on Canadian housing will be available in an otherwise quiet week for economic data. Housing starts and building permits will be reported on Tuesday and Wednesday, respectively. In the U.S., inflation is expected to pick up in July’s report, out Friday.

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Written by

Portfolio Specialist Group

AGF Investments Inc.

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