Here are four things you need to know this morning
Carney responds: Prime Minister Mark Carney has made a stark assessment of where Canada stands, as the U.S. continues to impose a series of punishing trade tariffs. At a news conference yesterday afternoon, Carney said, “It’s clear that the United States is no longer a reliable partner. It is possible that with comprehensive negotiations we will be able to restore some trust, but there will be no turning back. The next government and all that follow will have a fundamentally different relationship with the United States.” Carney says the Canadian government will respond based on what the U.S. administration announces on April 2, the day Trump has promised to unveil another round of import taxes. Carney says Trump reached out to arrange a call and he expects that conversation to take place in the “next day or two.” In an interview on Radio Canada, Cabinet minister Francois Phillipe Champagne said that call will take place today. Carney will also meet with provincial premiers today.
GDP reports mixed: While external threats hover overhead, we have some conflicting signals on the state of the Canadian economy. Gross domestic product expanded by a robust 0.4 per cent in January, the strongest monthly pace since April of last year. Mining and oil and gas extraction as well as manufacturing sectors led the gains. However, Statistics Canada’s estimate for February showed economic growth came to a halt, with gross domestic product coming in essentially unchanged. Growth in the manufacturing and finance sectors were offset by declines in real estate, oil and gas extraction and retail trade.
U.S. inflation persists: Meanwhile one of the economic indicators most closely watched by the U.S. Federal Reserve shows inflation in that country rose at a stubborn pace in February and household demand was weaker than expected. The so-called core personal consumption expenditures price index, which excludes food and energy items, rose 0.4 per cent from January. Inflation-adjusted consumer spending edged up 0.1 per cent after falling in January by the most in nearly four years, which economists blamed on bad weather. Whether the new policies of the Trump administration will lead to higher inflation is a fiercely debated topic south of the border.
Lululemon customers stretched: Shares of Lululemon are plunging in premarket trading. That’s after the company delivered disappointing outlooks for sales and profit for the full year. The Vancouver-based maker of activewear is flagging concerns about consumer spending in the U.S. Chief Executive Officer Calvin McDonald says American shoppers are keeping their wallets tight and visiting stores less often amid geopolitical strife and high inflation. Lulu says despite increased competition and slowing growth it’s working to lift demand by expanding product assortment and entering new categories.
