Economists See Slimmer Chance of More Rate Cuts in Canada This Year
Economists at two of Canada's largest lenders, Bank of Nova Scotia and Royal Bank of Canada, now say Governor Tiff Macklem and his officials will keep their benchmark rate at 2.75% through the end of 2025.
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Yahoo
17 minutes ago
- Yahoo
'Tariffs are starting to bite': Latest inflation, jobs data sparks Wall Street concern over US economy
Stocks have continued to notch record highs this year as investors bet on a resilient economy and minimal fallout from tariff-driven inflation. But last week, both assumptions came under pressure. It was a packed week for economic data, offering a more nuanced and, in some cases, sobering look at the state of the US economy. The week kicked off with signs of strain in the labor market: The hiring rate fell to a seven-month low, and the quits rate, a key measure of worker confidence, dropped to just 2%. On Wednesday, GDP data showed the economy rebounded at a 3% annualized pace in the second quarter, recovering from a surprise Q1 contraction driven by a pre-tariff surge in imports. But economists cautioned that the headline growth masked underlying softness. Sales to private domestic purchasers, a key proxy for consumer and business demand, rose just 1.2%, the weakest pace since 2022. Greg Daco, chief economist at EY-Parthenon, called the rebound an "economic mirage," adding that policy uncertainty, rising inflation pressures from tariffs, and tighter immigration constraints are starting to weigh more visibly on economic activity. Then, after the Fed held interest rates steady, Thursday's release of its preferred inflation gauge, the Personal Consumption Expenditures (PCE) index, showed price increases accelerated in June as inflation remained above the Fed's 2% target. Consumer spending also showed signs of strain as real personal spending rose just 0.1% in June following a revised 0.2% drop in May. The week culminated in a disappointing July jobs report, which offered the clearest sign yet that the labor market may be cracking. The US added just 73,000 jobs, far short of the 104,000 forecast. Even more striking were sharp downward revisions to May and June, which erased a combined 258,000 jobs, the largest two-month downgrade since May 2020. Taken in totality, last week's data painted a picture of mounting economic pressure, with growing signs that households are beginning to feel the strain as the second half of the year gets underway. "Tariffs are starting to bite," EY's Daco told Yahoo Finance. "They're leading to higher inflationary pressures, which are curtailing consumer spending and prompting businesses to adopt more of a wait-and-see approach." Michael Pearce, deputy chief US economist at Oxford Economics, said the overall trend is becoming clearer: "The signs are that consumer spending is losing momentum." He added that "as real income growth wanes, we expect an increasing drag on consumer spending, particularly on discretionary purchases and goods most exposed to tariff-driven price increases." While auto sales had been front-loaded earlier this year ahead of tariff implementation, Pearce pointed to renewed declines in tariff-sensitive categories like furniture. He noted that any short-term lift from early buying is now "mostly in the rear-view mirror," and warned that consumers have yet to fully absorb the impact of tariff-driven shocks to income and purchasing power. Adding to the pressure, trade tensions escalated as President Trump raised tariff rates on several US trading partners, including a surprise 39% levy on imports from Switzerland. "There's a repeated refrain that tariffs are not having an impact, and that assessment misses the mark," Wells Fargo economists, led by Jay Bryson, said in the latest installment of Yahoo Finance's Chartbook series. "Consumer spending is not as sturdy as it was initially reported in the first quarter," the team added. "With two months of data on hand for the second quarter, it is becoming increasingly clear that households are reducing their discretionary outlays." The strain is also beginning to show in corporate earnings. "When you take a look at companies like Whirlpool, like P&G, they are being impacted by tariffs," Michael Kantrowitz, chief investment strategist at Piper Sandler, told Yahoo Finance's Opening Bid. "There seems to be a sort of bifurcation when it comes to how tariffs are impacting bottom lines. Those that are focused on products for consumers ... And then you've got other companies, like Big Tech, that is sort of immune to the tariff situation." But even Big Tech is starting to feel the squeeze. Apple (AAPL) CEO Tim Cook warned this week that the company expects a $1.1 billion tariff hit this quarter. Elsewhere, a slew of consumer-facing companies, including Shake Shack (SHAK), Canada Goose (GOOS), and snack maker Kellanova (K), have struggled this earnings season as price-sensitive shoppers pull back. With contributing reporting from Yahoo Finance's Josh Schafer. Allie Canal is a Senior Reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at
Yahoo
17 minutes ago
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Patria Investments Second Quarter 2025 Earnings: Misses Expectations
Patria Investments (NASDAQ:PAX) Second Quarter 2025 Results Key Financial Results Revenue: US$82.5m (up 10.0% from 2Q 2024). Net income: US$12.9m (up by US$12.2m from 2Q 2024). Profit margin: 16% (up from 0.9% in 2Q 2024). EPS: US$0.081 (up from US$0.005 in 2Q 2024). This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. All figures shown in the chart above are for the trailing 12 month (TTM) period Patria Investments Revenues and Earnings Miss Expectations Revenue missed analyst estimates by 6.5%. Earnings per share (EPS) also missed analyst estimates by 76%. Looking ahead, revenue is forecast to grow 9.1% p.a. on average during the next 3 years, compared to a 6.0% growth forecast for the Capital Markets industry in the US. Performance of the American Capital Markets industry. The company's shares are down 2.6% from a week ago. Risk Analysis You still need to take note of risks, for example - Patria Investments has 2 warning signs we think you should be aware of. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
17 minutes ago
- Yahoo
Latest Trump tariffs unlikely to budge, top negotiator says
(Reuters) -The tariffs U.S. President Donald Trump imposed last week on scores of countries are likely to stay in place rather than be cut as part of continuing negotiations, Trade Representative Jamieson Greer said on Sunday. Ahead of a Friday deadline, Trump set rates including a 35% duty on many goods from Canada, 50% for Brazil, 25% for India, 20% for Taiwan and 39% for Switzerland, according to a presidential executive order. In trade talks since Trump returned to office, the White House has lowered some rates from levels initially announced, including halving import duties set last week as part of a deal with the European Union. Greer told CBS's Face the Nation on Sunday, however, that this would not be the case on the most recent round of tariffs. "A lot of these are set rates pursuant to deals. Some of these deals are announced, some are not, others depend on the level of the trade deficit or surplus we may have with the country," he said. "These tariff rates are pretty much set." Greer also said recent trade talks with Beijing had been "very positive" and were focused on the supply of rare earth magnets and minerals. "We're focused on making sure that the flow of magnets from China to the United States and the- and the adjacent supply chain can flow as freely as it did before ... and I'd say we're about halfway there."
