The Big Story Weekend listen: Economists struggling to forecast in uncertain times
Mar 9, 2025
Avery Shenfeld, Chief Economist at CIBC, shares his insights on the volatile economic landscape shaped by unpredictable trade policies. He discusses the challenges economists face forecasting in today's market, emphasizing how fluctuating tariffs impact Canadian exports and labor. The conversation highlights concerns about the automotive supply chain and the limitations of rapid manufacturing changes. Shenfeld also addresses inflation dynamics and the cautious role of the Bank of Canada amid these economic uncertainties.
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Tariff Impact and Uncertainty
- Tariffs negatively affect economies and consumers, making forecasting difficult.
- The uncertainty surrounding tariff implementation, duration, and specific targets makes economic projections challenging.
Interpreting Economic Indicators
- February's flat job growth might not reflect trade uncertainties but rather winter storms and prior strong hiring.
- Businesses may have accelerated economic activity by exporting goods before potential tariffs took effect.
Preemptive Stockpiling
- Canadian exports surged in January, likely due to businesses stockpiling goods before tariffs.
- Companies began preparing for potential trade disruptions as soon as Donald Trump was elected.