RENNIE OUTLOOK 2024
WAGES
Wage growth was somewhat of a bad news story masquerading as good news in 2023. Wages finally outpaced inflation last year, which is undoubtedly a good thing for individual workers, however with average weekly earnings in British Columbia growing by 4.5% over the past 12 months, it remains a concern for the Bank of Canada in its efforts to get inflation back to 2%.
OUR 2024 OUTLOOK
With a labour market that is likely to soften further in 2024, we expect wage growth to moderate this year. In our view, annual wage growth will likely be in the 2.5-3.5% range by the end of 2024.
INTEREST RATES
The Bank of Canada continued on its unprecedented rate-tightening cycle in 2023. Beginning the year with a policy rate of 4.25%, the Bank increased its policy three times to 5.00% (a prediction we missed last year). The Bank has held that rate since its last increase in July, with a view that monetary policy is sufficiently restrictive to return inflation to target.
OUR 2024 OUTLOOK
With inflation sliding back inside the target range of 1-3%, we expect the Bank of Canada to cut its policy interest rate four times in 2024, finishing the year at 4.00%, with the first cut likely to come in April.
Copyright © 2024 rennie group of companies. All rights reserved. This material may not be reproduced or distributed, in whole or in part, without the prior written permission of the rennie group of companies. Current as of February 5, 2024. Data from the Greater Vancouver and Fraser Valley Boards, Statistics Canada, Zonda Urban, CMHC, & rennie. While the information and data contained herein has been obtained from sources deemed reliable, accuracy cannot be guaranteed. rennie group of companies does not assume responsibility or liability for any inaccuracies. The recipient of the information should take steps as the recipient may deem necessary to verify the information prior to placing any reliance upon the information. The information contained within this report should not be used as an opinion of value, such opinions should and can be obtained from a rennie and associates advisor. All information is subject to change and any property may be withdrawn from the market at any time without notice or obligation to the recipient from rennie group of companies. E.&O.E. 12
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