April 2023 Market Update from Canada Life Investment Management

Canadians are feeling the squeeze of higher rates

There are some bright spots in the global economy, but the tighter financial climate is becoming clearer. The initial estimate for U.S. gross domestic product showed the U.S. economy grew at a 1.1% annualized rate during the first quarter, missing the forecast of 1.9%. The E.U. also fell short of Q1 GDP estimates. Early figures show the Eurozone grew 0.1% instead of the expected 0.2%, while the broader E.U. fared slightly better with 0.3% growth. Meanwhile, China’s economy expanded faster than expected over Q1.

Economic data released in April further adds to the mixed picture. In this month’s commentary, we unpack why Canadians are struggling despite falling overall inflation rates in Canada and the U.S., and why the Bank of Canada was right to pause hikes.