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The Conference Board released a report on Monday showing its reading on leading U.S. economic indicators slumped by more than expected in the month of April.

The report said the leading economic index tumbled by 1.0 percent in April after sliding by a downwardly revised 0.8 percent in March.

Economists had expected the leading economic index to decrease by 0.8 percent compared to the 0.7 percent drop originally reported for the previous month.

“The U.S. LEI registered its largest monthly decline since March 2023, when many feared the US was headed into recession, which did not ultimately materialize,” said Justyna Zabinska-La Monica, Senior Manager, Business Cycle Indicators, at The Conference Board.

“Most components of the index deteriorated,” she added. “Notably, consumers’ expectations have become continuously more pessimistic each month since January 2025, while the contribution of building permits and average working hours in manufacturing turned negative in April.”

Meanwhile, the Conference Board said its coincident economic index inched up by 0.1 percent in April after rising by 0.3 percent in March.

The report said the lagging economic index also rose by 0.3 percent in April after edging down by 0.1 percent in the previous month.

Australia’s central bank lowered its benchmark rate by a quarter-point for the second time this year as risks to inflation became more balanced, while uncertainties regarding economic outlook increased due to trade protectionism measures.

The policy board of the Reserve Bank of Australia, governed by Michele Bullock, decided to cut the cash rate target to 3.85 percent from 4.10 percent.

The current rate was the lowest in two years. Previously, the bank had reduced the rate by 25 basis points in February, which was the first cut since 2020.

The board judged that the risks to inflation became more balanced. Inflation reached the target band and upside risks appear to have diminished as international developments are set to weigh on the economy, the board observed.

“The Board assesses that this move will make monetary policy somewhat less restrictive,” the bank said.

Further, policymakers observed that the monetary policy is well placed to respond decisively to international developments if they were to have material implications for activity and inflation.

Headline inflation is forecast to rise over the coming year to around the top of the band as temporary factors unwind and underlying inflation is projected to be around the midpoint of the 2-3 percent range throughout much of the forecast period.

The People’s Bank of China reduced its benchmark interest rate for the first time in seven months to stimulate consumption and support the property market amid soothing trade tensions.

The central bank lowered its one-year loan prime rate by 10 basis points to 3.0 percent from 3.10 percent.

Likewise, the five-year LPR, the benchmark for mortgage rates, was reduced to 3.50 percent from 3.60 percent.

The bank had cut its both LPRs by 25 basis points each in October 2024.

The PBoC fixes the LPR monthly based on the submission of 18 designated banks. However, Beijing has influence over the fixing. The LPR replaced the traditional benchmark lending rate in August 2019.

The end of the consumer carbon price at the start of April drove inflation down sharply, Statistics Canada said Tuesday, but there were signs of pressure building at the grocery store.

The annual pace of inflation cooled to 1.7 per cent last month, down from 2.3 per cent in March, the agency said. That’s a little higher than the 1.6 per cent expected by a poll of economists.

But with a Bank of Canada interest rate decision set for early June, market odds flipped in favour of another rate hold from the central bank in response to the inflation data.

How today’s hotter-than-expected inflation report has shifted market bets and economist views for future BoC rate cuts

Canadians were primarily finding relief at the gas pumps in April.

Statistics Canada said gas prices fell 18.1 per cent year-over-year in April, thanks mostly to the end of the carbon price, but also because global oil prices fell amid declining demand and higher production from OPEC countries. Natural gas prices also fell 14.1 per cent annually in the month.

Excluding energy from the consumer price index, StatCan said inflation would have come in at 2.9 per cent for April – an increase from 2.5 per cent for the same calculation in March.

The only province that didn’t experience a slowdown in inflation last month was Quebec, a province that has its own cap-and-trade system and therefore didn’t benefit from the end of the federal carbon price regime.

But while consumers found it cheaper to gas up in April, pressure was building at the grocery store.

Prices for food bought from the store rose 3.8 per cent last month, StatCan said, accelerating from 3.2 per cent in March.

On an annual basis, prices for fresh vegetables rose 3.7 per cent, the cost of fresh and frozen beef was up 16.2 per cent and prices of coffee and tea rose 13.4 per cent, the agency said.

Grocery store inflation has now outpaced the overall consumer price index for three months in a row.

Canadian travellers also felt the pinch as travel tour prices rose 3.7 per cent monthly in April, reversing course after a decline of eight per cent in March.

The April inflation figures come a little more than two weeks before the Bank of Canada is set to make its next interest rate decision on June 4.

The central bank held its policy rate steady at 2.75 per cent last month, saying then that it needed more time to see how Canada’s trade war with the United States was impacting the economy.

Financial market odds of an interest-rate cut in June fell to just under 40 per cent Tuesday morning, compared with roughly 64 per cent at the end of last week, according to LSEG Data & Analytics.

While the headline inflation figures showed signs of easing in April, the Bank of Canada’s preferred measures of core inflation, which strip out influences like the end of the carbon price, accelerated to top three per cent in the month.

CIBC senior economist Andrew Grantham said in a note to clients Tuesday that the central bank will be watching that trend carefully, alongside indications that the tariff dispute was starting to bite Canada’s labour market.

StatCan reported earlier this month that the national unemployment rate rose to 6.9 per cent in April as the trade-sensitive manufacturing sector took a hit.

“Signs of renewed weakening in the economy on one hand, as shown by the latest employment data, but stronger core inflation on the other makes for a tough decision for the Bank of Canada at its early June meeting,” Grantham said.

TD Bank senior economist Andrew Hencic said in a note that signs of a resurgence in core inflation might mean that the tariff hit could be showing up sooner than anticipated in the price data.

Like Grantham, Hencic said the April inflation report “complicates” the Bank of Canada’s decision making.

The central bank typically raises its policy rate to tamp down price pressures and lowers it to encourage economic growth; policy-makers have made clear they can’t effectively lean against both a slowing economy and a resurgence in inflation at the same time in a trade war.

Hencic said TD sees two additional interest rate cuts from the Bank of Canada this year.

Canada Post says it has received strike notices from the union representing 55,000 postal workers.

The Crown corporation says the notices state that employees plan to hit the picket line starting Friday at midnight.

• The index of consumer sentiment dropped to 50.8, down from 52.2 in April and hitting its second-lowest reading on record.
• The majority of the survey was completed before the U.S. and China announced a 90-day pause on most tariffs between the two countries.
• The trade situation appears to be a key factor weighing on consumer sentiment.

https://www.cnbc.com/2025/05/16/consumer-sentiment-may-inflation-expectations-tariffs.html

Japan’s Honda Motor HMC-N forecast a 59-per-cent profit decrease in the current financial year and said it would put on hold a plan to build an EV supply chain in Canada, amid the uncertainty stemming from U.S. President Donald Trump’s tariffs.

 
Japan’s second-biggest automaker expects operating income to total 500 billion yen (US$3.38-billion) in the year to March 31, 2026, versus 1.21 trillion yen in the year that just ended.

 
Honda’s forecast is the latest signal of the difficulty car makers are having navigating Trump’s tariffs on foreign-made automobiles at the same time the industry is being hit by the rise of Chinese EV producers.

 
Honda also said it would put on hold for “approximately two years” a plan announced in April, 2024 to build an EV supply chain in Ontario, Canada. That decision was taken due to the current slowdown in EV demand, it said.

 
Talks between Honda and Nissan to merge broke off earlier this year, although the two still have an agreement to co-operate on technology. Such tie-ups are seen as increasingly important for automakers to counter the threat from fast-moving EV companies, particularly in China.

The Nova Scotia government made waves earlier this year when it introduced legislation that would remove red tape on out-of-province goods and make it easier for Canadians from other jurisdictions to work there.

But the province quickly learned the limits to its ambitions on labour mobility when professional bodies warned that the legislation would lead to a lack of oversight.

Nova Scotia ultimately abandoned its initial plan to allow service providers to work in the province without getting relicensed. The pivot demonstrates some of the potential challenges Canada could face as Prime Minister Mark Carney vows to dismantle interprovincial barriers and introduce similar legislation at the federal level in response to the trade war launched by U.S. President Donald Trump.

Some professional bodies in the province have argued that labour mobility wasn’t a pressing problem in the first place. Alec Stratford, the head of the Nova Scotia College of Social Workers, said internal free-trade laws seem more “performative” than substantive in the face of economic uncertainty.

“In the case of social work, I‘m not sure what anyone is talking about when they say we need greater labour mobility, because it’s a problem that we’ve been working on and have virtually solved,” Mr. Stratford said.

The bill introduced by Premier Tim Houston sought to allow Canadians licensed in other provinces, such as a teacher from Alberta or an engineer from Ontario, to work in Nova Scotia without having to undergo additional licensing, so long as their home province took similar steps to remove red tape.

It was the first legislation of its kind in the country, earning Mr. Houston praise for taking a sweeping step to knock down interprovincial trade barriers.

However, professional licensing bodies in Nova Scotia warned the government that the legislation would remove their authority to regulate workers who relocate to the province, meaning they wouldn’t be able to investigate and resolve any complaints against those service providers. Meanwhile, regulators in the workers’ home provinces likely would not have jurisdiction over what happens in Nova Scotia.

Ottawa agrees with provinces to act fast to topple internal trade barriers

Pal Mann, head of Engineers Nova Scotia, said regulators such as the one he represents were worried the legislation would open up a “big, fuzzy grey zone that created a risk to the public.”

The feedback prompted the government to amend its legislation, which passed in late March, so that it reinstated the requirement to be licensed in Nova Scotia but stipulated that bodies must approve eligible applicants within 10 business days.

Otherwise, not much has changed: Workers in regulated industries will continue to pay annual fees and follow the rules outlined by regulators.

Mr. Stratford said the amendments generally addressed the concerns raised by regulators. However, he said the law could potentially lower the standards for becoming a social worker in Nova Scotia, noting that Alberta only requires a diploma to become a social worker, while other provinces require a bachelor’s degree.

As for the timeline outlined in the legislation for approving licences for eligible applicants, Mr. Mann and Mr. Stratford both said their organizations have faster processing times than outlined in the new law.

Nova Scotia‘s new legislation is part of a broader push in Canada to unify the economy and increase domestic growth by boosting internal trade.

Mr. Carney has made removing interprovincial barriers a key objective of his government, frequently arguing that Canada needs one economy, not 13 for each province and territory. Ontario and Prince Edward Island are pursuing legislation similar to Nova Scotia‘s, and Mr. Carney has promised to bring forward legislation that would lift all federal barriers to trade between provinces and territories by July 1.

But from the perspective of professional bodies in Nova Scotia, it’s unclear what problem the provincial legislation was intended to address in the first place when it comes to labour mobility, and the amended bill hasn’t changed how the bodies operate.

Provinces are vowing to eliminate trade barriers. How much could it save you?

“I don’t think it was really a problem, regardless of the sound bites that were happening at the national political level of how it’s hard for an engineer to move from one jurisdiction to another,” Mr. Mann said.

Mr. Stratford shares a similar perspective, noting that said barriers to labour mobility had already been addressed by the Canadian free-trade agreement.

The CFTA, signed by the federal, provincial and territorial governments in 2017, ensures that workers have the right to be relicensed in other jurisdictions.

The agreement, which seeks to facilitate trade and labour mobility within Canada, stipulates that workers certified by a regulator should be certified by the equivalent regulator in another jurisdiction “without any requirement for any material additional training, experience, examinations or assessments as part of that certification procedure.”

However, the agreement still allows a regulator to impose additional training or requirements on a worker coming from another province with different academic credentials or education if the regulator can prove it leads to a skills deficiency.

A spokesperson for the Nova Scotia government said changes made to the legislation were the result of “listening to regulators and stakeholders.”

“We must resolve barriers to interprovincial trade and labour mobility, and mutual recognition helps promote dialogue and harmonization among provincial regulators that upholds high standards,” Monica Maclean said in a statement.

Shopify’s (SHOP-T +14.92%increase) stock surged more than 13 per cent in Monday morning trading after the Nasdaq stock exchange announced the e-commerce company would join its 100 Index on May 19.

The tech-heavy benchmark tracks the 100 largest non-financial companies listed on the Nasdaq exchange.

Shopify’s inclusion is expected to increase institutional investment in the company, as index-tracking funds must adjust their holdings to include Shopify.

“We think it’s positive in that it should increase the demand and liquidity [because] a wider range of funds tracking that index would need to buy shares. Beyond that, we think it also elevates the company’s profile with investors,” said National Bank analyst Richard Tse in an e-mail.

Shopify posts strong first-quarter revenue growth, but outlook lags expectations

In a note to investors Monday, Royal Bank of Canada analyst Paul Treiber said the inclusion was likely to result in greater liquidity in the shares, and may result in a share price premium relative to peers which are not included in the index.

The Canadian e-commerce business will maintain its dual listing on the Toronto Stock Exchange.

In February, Shopify named a new U.S. executive office in securities filings for the first time and made several changes to its reporting format, suggesting it was positioning its shares to be included in major U.S. stock indexes.

And at the end of March, the company transferred its U.S. stock listing from the New York Stock Exchange to the Nasdaq Global Select Market, saying it was doing so in order to more closely align itself with its software peers.

Shopify will replace computer program and database company MongoDB on the exchange.

Canadian companies shift focus to Europe for exports, growth

This U.S. shift comes during a period of heightened political and market attention on Canadian companies, as the country faces continued trade threats from the United States.

However, last week Shopify reported a 26-per-cent revenue jump in its first-quarter earnings, and the company’s results quelled investor fears about immediate impacts resulting from U.S. President Donald Trump’s tariffs and the removal of the de minimis exemption for China. The exemption allowed for the duty-free import of goods up to a value of US$800.

“The consensus view has been that the tariffs (macro) would have the company pausing or moderating growth expectations; yet, the outlook and commentary pointed to continued growth momentum,” said Mr. Tse in a note to investors last week