Crude oil prices are down $14/b (20%) in the last week. Apart from acute embarrassment for Danielle Smith (who called Trump's tariffs last week a "big win for Alberta & Canada"), there's an important lesson to be learned here about how crude oil futures markets work. #cdnecon /2 This thread draws on analysis of oil futures markets from @futurework_cda's recent report, "Counting the Costs": . It computes the costs of the 2022 oil price spike: directly & indirectly it cost the average Canadian household $12,000 over 3 years. /3 falseprofits.ca/reports

Trump says any car “not made in America” gets a 25% tariff. That means EVERY car gets a tariff, cuz there’s no such thing as a “car made in America.” Only cars made in NORTH America. Every one of which has a lot of 🇨🇦🇺🇸 and 🇲🇽 content in it. #cdnecon /2 More Americans will be hurt by this than Canadians and Mexicans, cuz far more Americans are employed making North American cars… and their plants will all be screwed up by this, too. /3

“Who’s Subsidizing Whom?” I have written a new report for the Centre for Future Work @futurework_cda rebutting Trump’s arguments that the U.S. “subsidizes” Canada through its bilateral trade deficit: . #cdnecon #cdnpoli #canlab /2centreforfuturework.ca/wp-content/upl… First, that deficit is 1/5 as large as Trump claims ($40bUS not $200b), US trade is more balanced with us than other partners (they sell us 92c for every $ they buy) & a deficit isn’t a “subsidy” anyway. Their big surplus in services offsets much of the deficit in merchandise. /3

Odd framing in @TorontoStar's cvg of the strike by (uncertified) Amazon workers in the US: . Of course their 'Cdn counterparts will not be joining': as @TheLawofWork has explained, non-certified workers in 🇨🇦 have no rights to protected concerted action. /2thestar.com/business/amazo… Before anyone jumps to the conclusion that US workers therefore have more power, remember that once Canadian workers get a certification (as they have in Quebec, and are seeking in BC & elsewhere), they have far more power--including to get an arbitrated 1st contract. /3

We have released a new report today from @CntrFutureWork on the economic benefits that are already visible from 🇨🇦's new $10-a-day national early learning & child care (ELCC) program: #cdnpoli #cdnecon /2 centreforfuturework.ca/wp-content/upl… Economists have long shown ELCC's many economic gains, via:
* Direct jobs in the ELCC sector
* Indirect / induced activity in upstream (supply chain) & downstream (consumer) industries
* Increased female labour supply
* Long-run gains from enhanced learning capacity in kids
/3

OK sir, now let's do 2024.
Hourly wages (measured by the LFS) have grown twice as fast as prices (measured by the CPI) in the last 12 mos.
And by the way, there are several other serious problems with that original chart, in addition to it being 2 years out of date. #cdnecon /2

https://twitter.com/PierrePoilievre/status/1825921941242351887

A. You don't calculate change in real wage by subtracting the inflation rate from % wage growth. You must calculate an index (dividing wage by CPI) and measure how that changes.
B. The proper change in so-called 'pay' (more on this below) for 2022 was thus -4.0%, not -4.3% /3

This is an own goal: Grocery prices did not surge 1.5% on June 25, they grew by 1.5% over the 12 months ending in May 2024. That's *lower* than the rate when Freeland announced the capital gains reform, and *below* the Bank of Canada's optimal 2% target for inflation. #cdnpoli /2

https://twitter.com/Ryan_r_Williams/status/1805975519227183230

Can we thus credit Freeland's tax reform for *lowering* the rate of grocery inflation? Of course not: it's ridiculous to link the two. Blaming taxes, instead of Loblaws, Cargill, PepsiCo, oil companies, and climate change for high food prices, is world-class bait and switch. /3

🇨🇦 consumers ride to the rescue!! 0.7% lift in real household consumption accounts for almost all the 0.4% rise in real GDP in 1Q24. That in turn was thanks mostly to a 1.5% rise in labour compensation, which grew 3x faster than consumer prices (consumption deflator). #cdnecon /2 Real wages are growing now at a decent pace, thanks to feisty unions, higher min wages, and workers demanding real wage repair. That has literally saved 🇨🇦 from a recession. This is the macroeconomic phenomenon of wage-led growth in action. #canlab /3

Biggest non-story in #Budge2024 is the deficit. Fcst hardly changed from last year, despite new spending on several initiatives. That's partly cuz of new $$ from the capital gains change (which is great). But mostly cuz revenues keep outpacing pessimistic forecasts. #cdnecon /2 Those forecasts are still deliberately pessimistic, leaving room for positive surprises before the 2025 election. Conservatives who've invested so much in attacking govt for running bigger deficits will be disarmed. A smaller deficit does nothing to help with cost of living. /3

Not the worst thing to fear this awful day, but important anyway: get ready for another burst of oil-led inflation. Orthodox central bankers will claim the only thing to do is keep int rates higher, for longer--punishing workers further for a crisis they didn't cause. /2 #cdnecon Can we learn from the Feb 2022 price shock, and stop profit-led energy inflation (which quickly spread into the broader economy) before it starts? Here's my Dec'23 @TorontoStar column with ideas for how to prevent another oil-led inflation outburst: . /3thestar.com/business/anoth…

Carbon-tax fever is reaching a peak, as April 1 (when both the price and the rebate payments increase) approaches. So I'm re-posting my review of gasoline prices in calendar 2023. Key takeaway: the ups and downs of gasoline prices can't be ascribed to carbon pricing. /2 #cdnecon Gasoline ended '23 5₵/litre lower than it began, despite a higher carbon price (worth about 3₵/l, offset by CAIP rebates). The ups & downs of oil prices are dominated by oil companies & futures markets, not carbon prices. The 2022 oil price surge added 40x more to gas prices./3

On this last day of 2023, let's look back at the path of gasoline prices (the most volatile major component in 🇨🇦's CPI) over the yr. According to GasBuddy, the avg price today is $1.39/litre. That's 5₵ cheaper than a year ago, but it followed a long, winding road. #cdnecon /2 Of course, the ups and downs of world oil futures markets are the major reason for this roller-coaster (even for gasoline extracted, refined & consumed here in 🇨🇦). What's striking is the irrelevance of Cdn fiscal & climate policies to the path of gas prices over the year. /3

Wow. It's probably a good thing Michelle Bullock was 7000km away from 🇦🇺 (in HK) when she said all this:
* Households "are actually in a pretty good position"
* Interest rates concerns are "a lot of noise from the general public" [...more]
@ComminsP /2

/2theaustralian.com.au/nation/shopper… * High housing prices are "helping people feel a little bit more wealthy"
* Households are "doing fine" & "managing quite well"
* Households have "large savings buffers" & "they're largely still intact"
* Per capita consumption is falling, but "nevertheless it's strong enough"
/3

Very encouraging news that @UniforTheUnion has reached a tentative agreement with GM Canada after a half-day work stoppage: . This is an important reminder that pattern agreements do not fall from the sky: it takes power to maintain a pattern. #canlab /2unifor.org/news/all-news/… Pattern bargaining used to be more common in 🇨🇦 private sector bargaining. Over past decades companies succeeded in destroying the practice in most sectors--allowing them to whipsaw workers against each other in the same industry. In this case, GM needed a push to swallow it. /3

This is what the NAIRU looks like: hundreds of people, desperate for work despite a labour market the Bank of Canada claims is 'overheated', lining up for a shitty job at McDonalds. Employers WANT more of this desperation: /2 #canlab #cdneconblogto.com/city/2023/08/h… It provides them with a ready pool of labour to draw on when they need it. (Gig platforms have this down pat.) And it frightens and disciplines other employed workers into accepting what their boss offers, instead of fighting back and (egad!) rejecting tentative agreements! /3

Pretty ironic to see the Bank of Cda cite the (slight) April increase in year/year CPI (from 4.3% to 4.4%) as part of the rationale for today's 8th interest hike. Let's refresh their memories as to the *causes* of that uptick, from the StatsCan release: www150.statcan.gc.ca/n1/daily-quoti… /2 The April uptick in yr/yr CPI was mostly due, StatsCan reported, to higher rents & mortgage debt charges. Both of those are direct effects of *higher* interest rates. Mortgage debt (3% of the CPI bundle) is skyrocketing. Rents are a bigger weight (6.57%), also growing fast. /3

Another installment in the Great Aussie Profit-Prices Debate occurred at Senate Estimates yesterday, when RBA Governor Philip Lowe was served a Dorothy Dixer by Senator Bragg, former ED of the BCA (who certainly has a view on whether profits can ever be "too high"). /2 Lowe repeated familiar RBA arguments about why he is not concerned that profits have fueled inflation. But it's worth closely reviewing his language, which speaks volumes about the prior assumptions baked into orthodox macro policy in 🇦🇺. /3

An interesting (and hopeful) angle in today's 🇨🇦 GDP release. Economy-wide inflation (measured by the GDP deflator) has largely abated: up just 1.3% in last 12 mos. This corresponds to a moderation of the excess profits corporations racked up in post-lockdown period. #cdnecon /2 Gross corporate operating surpluses are down 6% over the last yr. That's largely because of lower fossil fuel energy prices (& profits), but also due to easing supply constraints & lower profit-taking in other key sectors (like building products, autos, primary metals, M&E). /3

🧵For those fretting that incremental measures in today's 🇨🇦 #Budget2023 will somehow fan the flames of inflation, please remember: The fiscal foot has been firmly on the brake for 2 yrs. Program spending is down 1/3 since COVID peak. Down 12% in first 9 mos of this fy #cnecon /2 And for those who believe inflation is caused by deficits, please remember: 98% of the COVID deficit has been eliminated. Deficit over 1st 9mos of this fy was just $5.5b (Fiscal Monitor). Year-end deficit may be padded in the budget. But the deficit is effectively gone. /3

In light of Loblaw's inept efforts on social media to justify its super-sized inflation-fueling profits, this is an opportune time to remind shoppers of four crucial economic facts regarding supermarket profitability: 🧵

https://twitter.com/loblawco/status/1620474394282696704?t=C0Pl3OD38fCG1v7vnbWBhA&s=03

#cdnecon /2 A. Food retail profits have more than doubled from pre-pandemic norms. /3

🧵Consumer prices fell 0.6% in 🇨🇦 in Dec., yr/yr CPI growth fell to 6.3% (from 8.1% in June). This is good. But lest anyone interpret this as evidence that Bank of Canada tightening is 'working', or relief is imminent, let's review the short history of this inflation. #cdnecon /2 Pandemic caused big breaks in global supply (not fully repaired yet) & big shifts in global demand (mostly, not fully, rebalanced). Govt stimulus maintained aggregate demand & prevented a depression. For a short time, demand exceeded supply (mostly due to constrained supply). /3