Around the World – Week of July 10th Update

Author: Portfolio Specialist Group

July 10, 2017

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

Weekly Market Review


  • The Canadian economy added 45,000 jobs in June, though the majority came from part-time work. June’s strong report lowered Canada’s unemployment rate to 6.5%, matching a cycle-low.
  • The gains were fairly widespread across all major sectors. Within goods-producing categories, agriculture led with 12,000 new jobs. Professional services had a strong month, adding 27,000 jobs. Total hours worked also rose 0.4%, nearing a two-year high of 1.4% annualized.
  • Regionally, most of the gains were concentrated to British Columbia and Quebec, as six of 10 provinces actually reported marginal declines during the month.


  • U.S. employment continued to grow solidly in June, topping expectations with 222,000 jobs added. The prior two months were also revised higher by a total of 47,000.
  • The unemployment rate ticked up slightly to 4.4%, as more workers entered the labour force, though still remains near historical lows. Sluggish average hourly earnings were the lone weakness in the report, up only 2.5% year over year, however are still outpacing inflation.
  • Overall, this should be supportive of the U.S. Federal Reserve’s plans to unwind its balance sheet, with June’s meeting minutes showing that the committee holds “a range of views about the appropriate timing of a change in reinvestment policy”.


  • The eurozone’s unemployment rate remained at an eight-year low of 9.3% in May.
  • Germany, the region’s largest economy, continued to lead with unemployment at 3.9% while France saw its jobless rate edge higher, to 9.6%.
  • Also reported, eurozone retail sales rose more than expected in May with a 0.4% advance. On an annualized basis, sales grew by 2.6%.


  • Global manufacturing activity maintained its strong pace in June, close to levels last reached in 2014. The Markit Eurozone Manufacturing PMI rose for a 10th straight month to 57.4, with Austria, Germany and the Netherlands leading. The U.S., however, fell to 52.0, a fifth straight decline to a nine-month low. Overseas, the Caixin Manufacturing PMI in China rose to 50.4, while Japan’s Manufacturing PMI rose slightly to 52.4.
  • The U.S. ISM Non-Manufacturing PMI, which serves as an indication for future GDP levels, rose by 0.5 to 57.4 in June, exceeding expectations for a small decline. The surprise increase improved the six-month average to the highest level since 2015 as services activity continued to advance. 16 of 18 industries advanced during the month.

What’s to come

  • The Bank of Canada’s highly anticipated meeting will take place on Wednesday, where expectations are for a 25 basis points rate hike. In the U.S., both inflation and retail sales data will be reported. China, Germany and France will report their latest inflation data as well.


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Written by

Portfolio Specialist Group

AGF Investments Inc.

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