Rock bottom

And so it ends. No rate drop for borrowers in Canada this month. No interest cut in the States. No new trade deal with America. The housing market circling the drain. Some markers of a weakening economy, yet stock markets stay in party mode.

For the record, the Bank of Canada is holding the line on interest rates for the fourth time. That’s increased the criticism of Tiff Macklem, the boss at our CB. Realtors, lenders, brokers and the entire construction industry – now on its knees – have been warning of recession and keep telling our guy to drop rates.

In the US, ditto. The Fed held again. No change, as that CB worries about tariff-induced inflation, mass deportations and the labour market, while Trump is campaigning for Fed blood.

Check out this tirade from last night:

Jerome “Too Late” Powell has done it again!!! He is TOO LATE, and actually, TOO ANGRY, TOO STUPID, & TOO POLITICAL, to have the job of Fed Chair. He is costing our Country TRILLIONS OF DOLLARS, in addition to one of the most incompetent, or corrupt, renovations of a building(s) in the history of construction! Put another way,“Too Late” is a TOTAL LOSER, and our Country is paying the price!

There’s more.

Mark Carney says (righteously) that Canada will recognize a Palestinian state (without Hamas) in September, which got a predictable response from the White House where Canada is already called “mean and nasty.” Good buy trade deal. (It was gone anyway.)

Said the orange guy: “”Wow! Canada has just announced that it is backing statehood for Palestine. That will make it very hard for us to make a Trade Deal with them. Oh’ Canada!!!”

To Trump, trade isn’t about trade. It’s a weapon. (Trump has given Mexico a 90-day tariff reprieve. But not us little beavers.)

And here are the latest economic numbers to chew on.

We now have the fewest job vacancies in almost a decade. There are 90,000 less than a year ago (a drop of almost 16%). For every vacant job, three people are looking for work. In total, there are 190,900 more unemployed than at this time last year (a 14% increase).

The hardest hit sector was construction. No surprise there. Just read the latest news from the trenches.

In the GTA new home sales crashed 60% in June and are 82% below the ten-year average. In a market of more than six million people, barely more than 200 new condos were purchased, and fewer than 300 single-family homes. Unsold inventory has reached 22,254 units, of which almost 17,000 are condominiums. Yikes. That’s enough stock to satisfy the market into 2027 without any new construction, based on current sales.

“The new home market in the GTA remains deeply challenged and June’s sales and inventory numbers show that it is essentially bumping along at rock bottom,” says an industry spokesguy. “This is not a healthy or sustainable environment. The ongoing ‘cost to build’ crisis is prolonging the downturn and stalling recovery. To revitalize the market – a sector that is critical to Canada’s economic health – we need bold, immediate action from all levels of government.”

And yet government is pumping billions into low-cost financing for new building projects. The goal remains of adding 500,000 new units a year. So the issue is not supply. It’s price. And family finances

Ao where is our economy right now?

Probably growing weaker, says Stats Canada. There was a contraction in May, and some signs of a rebound in June. So far we have avoided a recession, but tomorrow there’s a new tariff reality to deal with. Our GDP fell in April and again the next month. But for the year to day, we’re flatter than Saskatchewan.

So what are we to make of all this?

If you thought the first half of 2025 was weird, just wait. The move from real assets to financial ones will continue. There’s further devaluation coming for residential real estate, despite interest rate cuts the BoC will be forced to make this autumn. Stock markets are likely to outperform on corporate profits and the US economy, even as Canada slides towards, or into, recession in the last quarter of the year. A slump in consumer spending seems inevitable, as does an increase for the inflation rate. We may all be sick of hearing about Trump, but his shadow is about to loom even larger.

Will Carney save us in the fall budget? Would Poilievre have played this better? Can Katy Perry help?

Bottom line: stay invested. Buy nothing. Turtle.

About the picture: “Thank you so much for prevailing with your blog offerings, which are always worthwhile to read,” writes Cathy. “This is my second photo submission – meet Jadis, my daughter’s perfect cat for a rented condo. Jadis was adopted through the Ottawa Humane Society last year and will celebrate her fifth birthday soon.  I so recommend that local animal lovers visit this wonderful facility, which features an in-house pet store and spacious, well-serviced quarters for pets awaiting their people.”

To be in touch or send a picture of your beast, email to ‘garth@garth.ca’.

Source: https://www.greaterfool.ca/2025/07/31/rock-bottom-2/