The current lower level of the dollar should continue to support export growth in Canada during and into , given that a lower dollar generally takes about four to six quarters to reach its maximum impact on non-energy export growth. Two years after emerging from a year-and-a-half-long recession, growth in the euro area is improving. Helen Willetts Editor: EI premium revenues. Most Popular. New housing starts have strengthened since the beginning of the year, although they remain in line with demographic requirements. This, in turn, impacted real GDP as these firms implemented sharp reductions in their investment spending.
Womck met Yu, 52, after he was appointed her attorney because she and four other Chinese women were arrested during a Jan. Yu and co-defendant Suhua Mei, 44, recently pleaded guilty to a lesser charge of accosting and soliciting, a misdemeanor, and were immediately sentenced and returned to China with the help of U.
Homeland Security. The three other co-defendants -- Guiqin Marchand, 60; Meijuan Yu, 49, and Hongmei Qu, 26 -- were not offered the deal by Macomb prosecutors and remain charged with two felonies, punishable by up to 10 years in prison. They believe the women were at the bottom link of the sex-trafficking chain.
There are different levels of actors. Womack said Yu expressed fear of retribution because they may be able to provide information about the ring to law enforcement officials. After they were arrested and posted bond, the two women were held in a safe house in Detroit until they pleaded guilty April 18 in Macomb County Circuit Court and traveled back to their homeland, attorneys said.
Yu and Mei said they were brought to the United States on the promise of a legitimate job, which is a common tactic of human traffickers, but end up performing sexual acts for customers. Mei also spent an unknown amount of time in NYC before coming to Harrison Township only four days prior to the raid. Yu and Mei do not speak English, and Mei indicated that short stint at the Jefferson Avenue spa she and Yu were locked inside and not allowed to leave, Davis said.
Yu was planning to escape when the raid took place, Womack said. She planned to flee by riding a taxi to Detroit Metropolitan Airport in Romulus. He said he did not know if she was planning to leave since she was in the area such a short time. In May , the owner of Washington Wellness Spa in Washington Township was found guilty of running a house of prostitution.
Two workers at the spa were arrested in February on prostitution charges. Kathy Maitland of Sterling Heights is executive director of the Michigan Abolitionist Project, which helps prevent sex trafficking, and member of the state Human Trafficking Commission.
She said local girls and boys and young adults are recruited into sex-trafficking. A survey found there were cases in Michigan, she said. A couple of national organizations track human trafficking, such as the Polaris Project based in Washington D. The organization says in , there were 5, cases of human trafficking in the United States reported to it.
National statistics say one in six juvenile runaways are victims of human trafficking, which includes trafficking for sex and labor. In Michigan, in the first quarter of , 57 of 74 cases involved sex trafficking in Michigan. At that pace, the number of human-trafficking cases will double from to A return to stronger growth is being hampered by ongoing private and public balance sheet repair, slow recovery in private investment and still-high unemployment, especially in peripheral countries.
Reflecting persistent economic slack, as well as lower crude oil prices, inflation in the region remains weak. Headline inflation is near zero, while core inflation i. In response, the ECB has indicated that it would re-examine the degree of monetary policy accommodation at its December policy meeting.
Domestic downside risks to the euro area economic outlook include lingering weak underlying momentum, low inflation and the latent threat of Greek contagion. The ongoing migrant crisis in the European Union EU could also potentially impose short-term strains on member country budgets. In Greece, financial uncertainty and contagion risks have subsided following the August agreement on a new European Stability Mechanism program and the September re-election of the Greek government.
However, should policy and political uncertainty re-emerge in Greece, sovereign and financial sector stress in the euro area could flare up, with potentially broader global spillovers. Other Advanced Economies. In other advanced economies, continued accommodative monetary policy and low oil prices should help support growth going forward.
In the United Kingdom U. While the fiscal outlook is on a stable footing, the impending referendum on U. Following strong growth of 2. In Japan, growth has been volatile since the start of the year. Following a minor contraction of 0. Excluding the impacts of lower commodity prices, core consumer prices are up 0.
Outside of periods following consumption tax hikes, this marks the fastest pace of core inflation in Japan i. The IMF expects growth in Japan to pick up to 0. Emerging Economies. In China, growth continues to moderate, as the economy gradually shifts away from investment and exports and towards a greater role for domestic consumption and services. Real GDP was up 6.
While the recent slowdown in Chinese growth has been fairly gradual, it has had a significant impact on the global economy, particularly on commodity markets. China accounts for roughly one half of global demand for base metals such as copper and aluminum.
The IMF expects the Chinese economy to grow 6. There remains considerable uncertainty about the extent of the slowing in growth in China. Such measures helped stoke a rapid run-up in Chinese equity prices over the first half of , which then unwound rapidly over the summer. The economic fallout from the recent equity market turmoil is expected to be limited, but the episode highlights the challenges facing the Chinese authorities in implementing financial and economic reforms while still supporting growth.
Recent declines in energy and other commodity prices have had negative impacts on commodity-exporting emerging economies, the largest being Russia and Brazil. Declining terms of trade for both countries resulted in sharp exchange rate depreciations and surging inflation, which has slowed consumer spending.
Hoping to avoid further inflation, the central banks in both Russia and Brazil have raised interest rates, further tightening financial conditions. The Russian economy also continues to be hampered by international sanctions related to its actions in Ukraine. Following subdued growth in , the IMF expects the economies of both Brazil and Russia to contract sharply in , followed by further moderate declines in Conversely, India, as well as other commodity-importing emerging economies in Asia such as Thailand, the Philippines and Vietnam, have all benefited from lower commodity prices.
With lower input costs and a stable domestic policy environment, growth in India is expected to remain stable at 7. The IMF expects economic growth in these countries to roughly maintain its strong pace or even accelerate in Overall, the IMF now expects global growth of 3. The slowdown reflects weaker growth in emerging economies more than offsetting modest improvement in advanced economies.
Global growth is expected to rebound to 3. However, given consistent downward revisions to global growth projections over the last four years, and the elevated level of uncertainty regarding the prospects for several important global economies, global growth could again disappoint relative to these expectations. Financial market volatility rose during the summer.
Volatility was further fuelled by slowing economic growth and a stock market correction in China. Chinese stock prices increased rapidly through the first half of , with gains fuelled by central bank interest rate cuts and a growing number of individual Chinese investors borrowing and purchasing equities on margin. Prompted by margin calls and a crackdown on unregulated loans, Chinese stock prices fell sharply beginning in mid-June Markets continued to fall into July and August, despite significant efforts on the part of the authorities to arrest the decline.
While Chinese equity prices have regained some ground since September, they remain close to levels seen before the run-up. The correction in Chinese equity prices through the summer, along with recent weaker Chinese economic data, translated into declines in global equity prices in August. Global markets have not rebounded materially and continue to experience elevated levels of volatility.
Beyond these factors, financial market volatility has also been affected by uncertainty over the timing and pace of monetary tightening in the U. Chart 2. Starting last May, government bond rates for most major developed economies rose from record low levels, in part due to expectations of eventual U.
However, the above-noted increase in uncertainty over the global economic outlook, and fears of broader spillovers from the Chinese equity market collapse, resulted in a flight to quality to the U. This led to lower bond rates in these countries, with yields still down from their peaks in June Chart 2. Global crude oil prices remain at levels less than half those prevailing in mid Chart 2.
However, prices once again declined beginning in early July, reflecting the collapse of Chinese equity prices and more generalized concerns about growth prospects in China. Prices were also pushed down by an agreement in principle on the removal of Iranian trade sanctions, potentially resulting in a material increase in global oil supply as early as As well, the continued increase in production from the Organization of the Petroleum Exporting Countries OPEC has also contributed to the recent weakening in oil prices.
Canadian prices have declined broadly in line with WTI prices, leaving the discount for Canadian prices close to its average since Canada is a global-scale producer and exporter of many commodities beyond crude oil, including wood pulp, wheat, aluminum, nickel and zinc.
Changes in the prices of these commodities affect the income of commodity-producing firms and their domestic investment and employment decisions. The global oil market is currently oversupplied, though not excessively so. The fundamental factor weighing on global prices is that global supply has not yet fallen sufficiently in response to weaker global demand growth.
This is because producers are shutting down their least productive rigs and refocusing efforts on fields with lower costs and higher productivity. As a result, crude oil inventory levels remain near record highs, placing further downward pressure on prices. Moreover, OPEC countries have abandoned their role as swing producer and continue to maintain and even increase their production levels, in an effort to maintain their global market share.
Persistently low crude oil prices have resulted in repeated downward shifts in futures prices, particularly over the medium term. Ongoing weaker-than-expected global economic growth, along with increased supply, has also dampened prices for most other commodities Chart 2. In particular, expectations of slower global growth have pushed down base metal prices notably since Budget Agriculture prices have declined due to lower prices for wheat and live cattle, reflecting increased North American inventories.
Lumber prices have improved since Budget due to stronger U. Following the collapse in oil prices in mid, Canadian economic activity fell in the first half of , with real GDP declining by 0. Lower crude oil prices resulted in a reduction in the incomes and profits of firms in the energy sector. This, in turn, impacted real GDP as these firms implemented sharp reductions in their investment spending.
Total business investment fell Despite the observed decline in overall economic output, the contraction during the first half of was concentrated in those areas of the economy most closely related to the energy sector. Output in these sectors fell by 7. Output has recovered some of these losses and now stands 3.
In contrast, output in all other sectors of the economy has grown by 0. Other factors restrained output growth in non-energy related sectors during the first half of These included weaker consumption after consumption growth outpaced income growth in mid , the very weak performance of the U. In addition, the external economic environment over this period was highly uncertain, due to the near exit of Greece from the euro area and concerns about equity markets and overall economic prospects in China.
More recently growth in Canada has resumed, with monthly real GDP up in June, July and August following five consecutive months of declines. Real manufacturing sales grew by 4. The pick-up in exports is also being aided by strong momentum in U. The Canadian dollar began depreciating in the third quarter of The current lower level of the dollar should continue to support export growth in Canada during and into , given that a lower dollar generally takes about four to six quarters to reach its maximum impact on non-energy export growth.
Job gains in have been concentrated in full-time employment, which has increased by about , net jobs over the first 10 months of this year, while part-time employment has increased by about 50, However, this gain was in large part related to the temporary impact of the federal election, which boosted overall employment growth in October Chart 2.
Despite ongoing employment gains, the unemployment rate has edged up to 7. This is due to the fact that employment gains have not kept pace with labour force growth throughout , particularly in the Western provinces. Overall, the unemployment rate has not shown any durable declines since the beginning of , but rather has averaged 7.
The youth unemployment rate remains more elevated at Residential investment has continued to support real GDP growth throughout New housing starts have strengthened since the beginning of the year, although they remain in line with demographic requirements. Existing home sales and prices have also generally risen, and later stabilized, through The appreciation in the national average home price continues to mostly reflect developments in Toronto and Vancouver.
In these two cities, strength in resale prices is being bolstered by strong price gains among the most expensive homes in the single-detached segment, partly as a result of land scarcity and continued urban densification. In the rest of Canada, housing market activity has generally remained moderate Chart 2.
The exception is in resource-producing regions, such as Alberta, where the impact of lower oil prices led to a sharp cooling of housing market activity between November and February Along with rising national house prices, there has been an increase in the level of household indebtedness in Canada, as the majority of household debt is mortgage debt. As a result, household net worth continues to rise, and is now more than 7.
Several factors will support Canadian economic growth in the coming quarters. These include the lower value of the Canadian dollar and the steadily improving U. Accommodative monetary policy conditions are also continuing to support consumption and residential and business investment. However, given the renewed fall in crude oil prices in the third quarter, energy-related investment will likely continue to act as a drag on output growth in the second half of and into , albeit to a lesser extent than in the first half of this year.
Economic activity will continue to be heavily influenced by the global economy, which has experienced slower-than-anticipated growth in recent years and may continue to do so going forward. This practice has been supported by international organizations such as the IMF.
The economic forecast presented in this section is based on a survey conducted in the first week of October The October survey includes the views of 15 private sector economists: Canadian Federation of Independent Business,. The Conference Board of Canada,. Laurentian Bank Securities,. National Bank Financial Group,. TD Bank Financial Group, and.
In the survey, private sector economists expect Canadian real GDP growth to slow to 1. Prices are expected to increase in but at a slower pace than expected in Budget Beyond next year, the economists expect WTI prices to rise at a similar rate as projected in Budget While GDP inflation the broadest measure of economy-wide price inflation was higher than anticipated in the first half of , lower crude oil prices have led the private sector economists to revise down their expectations for GDP inflation for the second half of and for As a result of these developments, nominal GDP growth in the October survey of private sector economists is expected to be 0.
Table 2. Average Private Sector Forecasts. Actual 1. Real GDP growth. Budget 2. GDP inflation. Nominal GDP growth. Budget All values for Q1 and Q2 for the Fall Update are actual values and are in italics. Annual figures have been restated due to historical revisions to the Canadian System of National Accounts from Statistics Canada.
The economists have revised up their outlook for the unemployment rate by 0. They expect the unemployment rate to fall to 6. Reflecting higher CPI inflation in the first half of than anticipated at the time of the budget, the outlook for CPI inflation has been revised up to 1. The economists have significantly revised down their expectations for both short- and long-term interest rates over the medium term relative to Budget This mainly reflects developments since the time of the budget.
Risk Assessment. Risks surrounding the Canadian outlook remain tilted to the downside, mostly reflecting low and volatile global oil prices and a weak and uncertain global environment. Externally, the overall risk remains that growth in emerging and advanced economies continues to fall short of expectations. Growth in China is expected to continue its gradual moderation.
However, a sharper-than-expected slowdown remains possible, given the challenges facing Chinese authorities in balancing the reorientation of their economy to a more sustainable growth model with the goal of meeting their announced growth targets. In the U. The most likely source is greater-than-expected drag from net exports, reflecting weaker foreign demand and further U.
The Federal Reserve is expected to begin raising its policy rate at the end of this year. The prospect of higher interest rates and a stronger U. Across advanced economies, productivity growth has continued to fall short of its pre-recession pace. Together with the ongoing impact of population aging on employment growth, this suggests that potential growth rates of advanced economies might stabilize at levels lower than those seen before the recession.
Overall, this suggests that the pattern of continued global underperformance relative to expectations may not yet have run its course. There is therefore a risk that current global growth projections will again be too optimistic. In Canada, the sharp decline in crude oil prices since mid has had clear negative impacts on the economy in the first half of While growth is expected to resume in the third quarter of , the impact of sustained lower oil prices on the Canadian economy may not have been fully realized yet.
Moreover, the possibility of further cutbacks in energy-related investment and employment could result in a re-emergence of very weak growth during the fourth quarter of and into the first half of A further decline in oil prices, or persistence in their current weakness, would result in further economic weakness.
Canadian household debt levels also remain elevated relative to historical norms. While this is not a risk in and of itself, it does limit the contribution that consumption and residential investment can make to growth. Moreover, if there were a negative external shock to the economy, this could trigger deleveraging among those households holding higher levels of debt, leading to a commensurate impact on consumption and residential investment.
This possibility, along with the potential for a more prolonged period of flat or even declining commodity prices and elevated levels of domestic household debt, could impede the return to stronger growth in Canada for some time to come. While the balance of risks is clearly on the downside, there are also some upside risks to the outlook.
Specifically, it is possible that oil prices will firm more rapidly than expected, that the U. The Government will continue to evaluate economic developments and risks to determine whether or not it would be appropriate to maintain this forecast adjustment in the future. Budget 1. Nominal GDP level billions of dollars. Forecast adjustment.
Difference between Fall Update adjusted for planning purposes and Budget 1. Unemployment rate. Consumer Price Index inflation. Figures have been restated due to historical revisions to the Canadian System of National Accounts from Statistics Canada. For Budget , Department of Finance March survey of private sector economists; for the Fall Update, Department of Finance October survey of private sector economists.
Chapter 3. Changes in the Fiscal Outlook. Since the April Budget. The lower forecast for nominal GDP largely reflects the contraction in real output during the first half of the year and the economic impact of the decline in commodity prices, led by lower crude oil prices.
Interest rates are also lower than projected in Budget A summary of changes since Budget is provided in Table 3. Table 3. Budget budgetary balance 1. Revised budgetary balance. Economic and fiscal developments by component 2: Budgetary revenues. Program expenses. Major transfers to persons. Major transfers to other levels of government. Direct program expenses.
Public debt charges. Total economic and fiscal developments. Totals may not add due to rounding. Budgetary balance before set-aside for contingencies. A negative number implies a deterioration in the budgetary balance lower revenues or higher spending. A positive number implies an improvement in the budgetary balance higher revenues or lower spending. Compared to Budget , projected budgetary revenues are lower across the forecast horizon, reflecting the lower forecast for nominal GDP, as well as lower projected interest rates which negatively impact the expected rate of return on interest-bearing assets, recorded as part of other revenues.
Major transfers to persons are projected to be higher than in Budget , largely due to higher projected. Employment Insurance benefits, reflecting the weaker economic outlook. Major transfers to other levels of government are broadly unchanged from Budget projections in the near term.
Since the April Budget. The pick-up in exports is also being aided by strong momentum in U. Customs import duties.