The latest statement from the U.S. Federal Reserve said, pretty much, what had been expected: interest rates won’t move, no quantitative easing and Operation Twist (selling short-term bonds to finance the purchase of longer term bonds, in an effort to push down longer-term yields) will be extended.
On the unexpected side, the Fed basically trashed its April forecast, downgrading its numbers and expressing concern about economic growth, particularly employment growth. The language used triggered speculation the central bank is moving QE3 from the background to the foreground.
The jobless numbers out of the U.S. today show the labour market is still struggling. Although initial jobless claims fell by 2,000 last week, the 4-week rolling average shows an increase of 3,500 to 386,250.
In Canada, the number of people receiving Employment Insurance dropped more than 5% in April to about 514,000, the third straight decline. The number of new or renewal claims was virtually unchanged from March at 236,000. That figure has been stable since September.
Retail sales in Canada surprised with 0.5% drop in April. Expectations were for a 0.3% increase m/m. Eight of 11 sub-sectors reported declines. Volumes were down 0.8% from March. Y/Y April retail sales were up 3.4%.
Back in the U.S. another sign of weakness as home resales dropped 1.5% in May. The National Association of Realtors also reports prices climbed by nearly 8% but that can be attributed to the decline in sales of lower priced homes. The April figures from the Federal Housing Finance Agency show prices increased 0.8%. Y/Y FHFA reports a 3.0% increase.
Tags: Commercial, Mortgages, Apartment, Multi-family, Financing, Lending, Canada, Vancouver, Calgary, Montreal, Toronto, Halifax, CMHC