Jan. 9, 2015

ALBERTA

  • Premier Jim Prentice said Alberta will have a $500 million deficit in 2014-15 due to lower oil prices.
  • Each $1 drop in the price of oil, over the course of 1 year, costs the province $215 million.
  • Oil at $65 will reduce previous revenue estimate by $6.7 billion.
  • The province is forecasting an average price of $75 boe for 2016-2017 and a $4.9 billion deficit; anticipating a balanced budget in 2017-2018.
  • If oil remains below $50 per barrel, Alberta has virtually no oil revenues and a $10 billion ‘revenue hole’.

CANADA

  • Canada lost 4,300 net jobs in December (full time up 53,500 and part time down 57,700), leaving the unemployment rate unchanged at 6.6%.
  • 2014 Canada added 185,700 jobs (1%), labour participation rate 65.9%.
  • Alberta added 6,000 jobs, BC added 2,000, Quebec lost 7,000 and Ontario lost 4,000.
  • Canadian December housing starts fell 6.5% to 180,600. Rural down 9.8% and urban down 6.2%.
  • Deutsche Bank says homes in Canada are 63% overvalued based on average annual earnings; values in Canada are 35% above the historical average relative to incomes and 91% higher compared to rent.

UNITED STATES

  • S. added 252,000 jobs in December vs 240,000 expected, making 11 consecutive months over 200,000. Unemployment rate fell to 5.6% vs 5.8% M/M.
  • Average hourly earnings fell 5¢ M/M to $24.57, but were still up 1.65% Y/Y.
  • S. November consumer borrowing rose $14.1 billion M/M.
  • Q3 auto-loan delinquencies were 3.4% vs 3.2% Y/Y, highest since 2008.
  • As part of his State of the Union preview, President Obama is proposing free community college to students who maintain a 2.5 grade point average and is reducing the annual fees charged to guarantee mortgages to 0.85% from 1.35% to encourage home purchases by low income families.

GLOBAL

  • ECB staff presented policy makers with models for buying as much as €500 billion of investment grade bonds, 50% of their stated goal.
  • European Union consumer prices fell 0.2% in December Y/Y vs the 0.1% decline expected.
  • German December unemployment fell to 6.5% the lowest in more than 20 years. Euro region unemployment is 11.5%.
  • Italian November unemployment increased to 13.4% vs 13.3% M/M. Youth unemployment rose to 43.9% vs 43.3% M/M.
  • China’s December inflation was near a five year low of 1.5%, they are fast-tracking $1 trillion in infrastructure projects to spur growth.
  • Venezuelans are smuggling fish to Columbia to make ends meet during the economic crisis.