Friday March 24 2017
Canada Inflation Rate Slows To 2% In February
Statistics Canada | Luisa Carvalho | luisa.carvalho@tradingeconomics.com

Consumer prices in Canada increased 2 percent year-on-year in February of 2017, easing from a 2.1 percent rise in the preceding month and below market expectations of 2.1 percent. Telephone services declined and food prices posted the biggest drop since 1971. In contrast, transportation and shelter contributed the most to the rise in the CPI.

Year-on-year, transportation cost rose 6.6 percent after a 6.3 percent increase in January, led by gasoline prices. This acceleration occurred despite a 0.8 percent monthly decline in February. The purchase of passenger vehicles index increased less in February (3.6 percent) than in January (3.8 percent).

Prices of recreation, education and reading advanced 3.3 percent, following a 3.2 percent increase in January. A 6.2 percent rise in the traveller accommodation was partly attributable to major sporting events that took place in February. The travel tours index fell 0.5 percent, after increasing 5.5 percent a month earlier.

The household operations, furnishings and equipment index went up 0.6 percent, after rising 1.2 percent in the previous month. This deceleration was led by the telephone services index, which declined 2.2 percent, following a 1.6 percent increase in January. In contrast, the Internet access services cost rose 0.2 percent, following a 1 percent decline in January.

Consumers paid 2.3 percent less for food compared with a year ago, due to lower prices for fresh vegetables (-14.0 percent) and fresh fruit (-13.3 percent) which reflect a spike in their prices last winter. Also, the prices of dairy products fell 2.5 percent, its largest decrease since March 1994, namely lower cheese prices. Prices for food purchased from restaurants rose 2.3 percent, matching the gain in January.

On a monthly basis, consumer prices went up 0.2 percent after a 0.9 percent rise in January.

Excluding food and energy, consumer prices were up 0.4 percent on the year and excluding gasoline only, prices gained 1.3 percent. 




Friday March 10 2017
Canada Jobless Rate At 2-Year Low Of 6.6%
Statistics Canada | Yekaterina Guchshina | yekaterina@tradingeconomics.com

The unemployment rate in Canada decreased to 6.6 percent in February of 2017 from 6.8 percent in the previous month and below market expectations of 6.8 percent. It was the lowest jobless rate since January of 2015. Employment rose by 15.3 thousand, beating market consensus of a 2.5 thousand increase.

Full time employment jumped by 105.1 thousand, following a 15.8 thousand increase in January. Part time employment fell by 89.8 thousand after a 32.4 thousand gain in the previous month.

The employment growth was recorded mainly in the service sector, with increases in retail and wholesale trade (by 19100) and public administration (by 11900).

Meanwhile, the labor force participation rate fell to 65.8 percent from 65.9 percent in the previous month.




Tuesday March 07 2017
Canadian Trade Surplus Widens In January
Statistics Canada | Yekaterina Guchshina | yekaterina@tradingeconomics.com

Canada's merchandise trade surplus widened to CAD 0.81 billion in January 2017 from a downwardly revised CAD 0.45 billion a month earlier and above market expectations of a CAD 0.7 billion surplus. Exports were up 0.5 percent to a record CAD 46.5 billion on higher sales of motor vehicles and canola. Imports decreased 0.3 percent to CAD 45.6 billion, mainly due to lower purchases of unwrought gold.

Exports rose 0.5 percent to a record CAD 46.5 billion. Higher exports of motor vehicles and parts (7.7 percent), as well as farm, fishing, and intermediate food products (12.8 percent) were the largest contributors to the increase. Also, canola exports jumped 38.4 percent to a record high of  CAD 845 million, reflecting higher Chinese demand for Canadian canola.

These increases were partially offset by declines in exports of consumer goods, as well as metal and non-metallic mineral products. In January, exports excluding energy products rose 0.9 percent.

Exports to the United States rose 2.3 percent to CAD 34.6 billion, led by higher exports of passenger cars and light trucks. Exports to countries other than the United States fell 4.4 percent to CAD 11.8 billion. Lower exports to Switzerland (-CAD 298 million) and Spain (-CAD 200 million) contributed to the decline, both due to fewer aircraft sales.

Total imports edged down 0.3 percent to CAD 45.6 billion. The decline in imports of metal and non-metallic mineral products (-5.5 percent), as well as industrial machinery, equipment and parts was partially offset by higher imports of motor vehicles and parts (3.6 percent). 

Imports from the United States went up 0.3 percent to CAD 30.1 billion. Imports from countries other than the United States decreased 1.3 percent to CAD 15.5 billion. Imports from Japan fell 27.2 percent, on lower purchases of passenger cars and light trucks.

Year-over-year, exports rose 1.8 percent while imports were down 2.1 percent.





Thursday March 02 2017
Canada GDP Growth Slows to 0.6% In Q4
Statistics Canada | Joana Taborda | joana.taborda@tradingeconomics.com

The Canadian economy expanded 0.6 percent on quarter in the last three months of 2016, slowing from a 0.9 percent growth in the previous quarter. Final domestic demand continued to decelerate, with ongoing weakness in business investment. Considering full 2016, the economy expanded 1.4 percent, following a 0.9 growth in 2015.

Household expenditure grew 0.6 percent, a slightly slower pace than the previous quarter (0.7 percent). Growth was driven by higher outlays on durable goods (2 percent) and financial services such as mutual funds and stock and bond commissions (1.6 percent). Investment in housing increased 1.2 percent.

Exports rose 0.3 percent, following a 2.3 percent gain in the third quarter. Exports of both goods (0.3 percent) and services (0.5 percent) increased. Imports of goods fell 4.1 percent, leading to a 3.5 percent drop in overall imports. Some of this decline was attributable to the one-time import of a large module destined for the Hebron offshore oil project in the third quarter.

Business gross fixed capital formation decreased 2.1 percent, following a 0.5 percent decline in the third quarter. Business investment in non-residential structures fell 5.9 percent following the strong growth in the third quarter (3.5 percent), partly due to a large one-time investment in the Hebron offshore oil project. Investment in machinery and equipment (-2.7 percent) and intellectual property products (-1.9 percent) was also down.

Businesses reduced their inventories by CAD 5.0 billion in the fourth quarter, after accumulating CAD 7.4 billion in the third quarter. Manufacturing inventories were drawn down by CAD 6.9 billion. Retail inventories of motor vehicles were reduced by CAD 1.9 billion, as household purchases of vehicles increased 1.5 percent and imports of passenger cars and light trucks fell 6 percent.

Expressed at an annualized rate, real GDP rose 2.6 percent in the fourth quarter, below an upwardly revised 3.8 percent surge in the third quarter but beating market estimates of a 2 percent growth.




Wednesday March 01 2017
Canada Holds Key Rate At 0.5%
BoC | Yekaterina Guchshina | yekaterina@tradingeconomics.com

The Bank of Canada held its overnight rate at 0.5 percent on March 1st, 2017 as widely expected. The Bank Rate was also left on hold at 0.75 percent and the deposit rate at 0.25 percent.

Statement by the Bank of Canada:

CPI inflation rose to 2.1 per cent in January, reflecting higher energy prices due in part to carbon pricing measures introduced in two provinces. The Bank is looking through these effects, as their impact on inflation will be temporary. The Bank’s three measures of core inflation, taken together, continue to point to material excess capacity in the economy.

Overall, recent data on the global and Canadian economies have been consistent with the Bank’s projection of improving growth, as set out in the January Monetary Policy Report (MPR). In Canada, recent consumption and housing indicators suggest growth in the fourth quarter of 2016 may have been slightly stronger than expected. However, exports continue to face the ongoing competitiveness challenges described in the January MPR. The Canadian dollar and bond yields remain near levels observed at that time. While there have been recent gains in employment, subdued growth in wages and hours worked continue to reflect persistent economic slack in Canada, in contrast to the United States.

The Bank’s Governing Council remains attentive to the impact of significant uncertainties weighing on the outlook and continues to monitor risks outlined in the January MPR. In this context, Governing Council judges that the current stance of monetary policy is still appropriate and maintains the target for the overnight rate at 1/2 per cent.




Wednesday March 01 2017
Canada Current Account Gap Narrows Sharply in Q4
Statistics Canada | Deborah Neves | deborah.neves@tradingeconomics.com

Canada current account gap narrowed CAD 9 billion to CAD 10.7 billion in the fourth quarter of 2016 from an upwardly revised CAD 19.8 billion in the previous period, but above market expectations of CAD 9.8 billion deficit. It was the lowest current account gap recorded since third quarter of 2011 as the goods balance posted its first surplus in more than two years.

The balance on the international trade in goods posted a $0.8 billion surplus in the fourth quarter, following an $8.6 billion deficit the previous quarter. Total exports of goods rose $6.3 billion to $136.5 billion in the fourth quarter. Energy products, led by crude petroleum, were the major contributor with exports up $4.7 billion on higher prices and, to a lesser extent, higher volumes. Total imports of goods were down $3.1 billion to $135.8 billion. Industrial machinery, equipment and parts recorded the largest reduction, down $2.7 billion. This followed a high in the third quarter, with activity dominated by the import of a large module for the Hebron offshore oil project in Newfoundland and Labrador. 

On a geographical basis, the goods surplus with the United States, led by stronger exports of energy products, increased $3.7 billion to $12.0 billion in the fourth quarter. Meanwhile, the deficit with non-US countries narrowed by $5.7 billion to $11.2 billion, mainly on record exports.

The overall deficit on international trade in services remained at $5.5 billion in the fourth quarter.In the fourth quarter, the travel deficit was unchanged at $3.6 billion. Receipts and payments rose as both the number of international overnight travellers visiting Canada and the number of Canadians travelling abroad for one or more nights increased. In the fourth quarter, the travel deficit was unchanged at $3.6 billion. Receipts and payments rose as both the number of international overnight travellers visiting Canada and the number of Canadians travelling abroad for one or more nights increased.

The investment income deficit, the difference between incomes generated on Canada's international assets and liabilities, increased $0.5 billion to $4.8 billion in the fourth quarter. Profits earned by foreign direct investors on their Canadian assets were up $1.3 billion to their highest level since the end of 2014. On the receipt side, profits earned by Canadian direct investors on their assets abroad increased by $1.1 billion. Higher income payments on foreign holdings of Canadian securities, both equity and debt securities, also contributed to the increase in the deficit in the fourth quarter.

For the year 2016, the current account deficit edged up $0.1 billion to $67.7 billion. The goods deficit was up $2.9 billion to a record $25.9 billion, mainly due to decline by $3.6 billion in exports as energy products continued to fall. By contrast, imports edged down by $0.7 billion. The services deficit narrowed $2.4 billion to $22.1 billion on a lower travel deficit. Spending by foreign travellers in Canada increased by $2.9 billion.




Friday February 24 2017
Canada Inflation Rate At Over 2-Year High
Statistics Canada | Joana Taborda | joana.taborda@tradingeconomics.com

Consumer prices in Canada increased 2.1 percent year-on-year in January of 2017, following a 1.5 percent rise in the previous month and beating market expectations of 1.6 percent. It is the highest gain in consumer prices since October of 2014, boosted by gasoline and shelter, bringing inflation to above the central bank target of 2 percent.

Year-on-year, prices were up in seven of the eight major components: transportation rose 6.3 percent after a 3 percent gain in December, led by gasoline prices, which posted their largest increase since September 2011, up 20.6 percent. The increase was partly attributable to higher crude oil prices in January, as well as a monthly decline one year earlier. The purchase of passenger vehicles index rose more in January (+3.8 percent) than in December (+2.6 percent). This acceleration was partly attributable to the greater availability of new 2017-model-year vehicles. The rail, highway bus and other inter-city transportation index was up 3.2 percent.

The shelter index rose 2.4 percent, with the homeowners' replacement cost index (+4.3 percent) contributing the most to the gain. The natural gas index increased 15.6 percent, after decreasing the previous month. Fuel oil prices rose 18.3 percent after increasing 4.2 percent a month earlier. At the same time, electricity prices (-0.7 percent) were down year over year for the first time since February 2013.

Consumers paid 2.1 percent less for food in January than they did a year earlier. The food purchased from stores index decreased 4.0 percent, with broad-based declines among its components. The fresh vegetables (-15.5 percent), fresh fruit (-10.8 percent) and meat (-1.7 percent) indexes all posted larger year-over-year declines in January than in December. A limited number of food product categories recorded price increases. Prices for food purchased from restaurants were up 2.3 percent, matching the gain in December.

On a monthly basis, consumer prices jumped 0.9 percent after declining 0.2 percent in December.

Excluding food and energy, consumer prices were up 1.7 percent on the year and excluding gasoline only, prices gained 1.5 percent. 



Friday February 10 2017
Canada Jobless Rate Falls To 6.8% In January
Statistics Canada | Joana Taborda | joana.taborda@tradingeconomics.com

The unemployment rate in Canada declined to 6.8 percent in January of 2017 from 6.9 percent in December and below market expectations of 6.9 percent. Employment rose by 48.3 thousand, beating expectations of a 5 thousand decline for the second month.

Full time employment increased by 15.8 thousand, following a 0.4 thousand fall in December. Part time employment rose  by 32.4 thousand after a 0.5 thousand gai in the previous month.

Nearly all of the employment growth in January came from the service sector, with increases in finance, insurance, real estate, rental and leasing; business, building and other support services; transportation and warehousing; and public administration. On the other hand, there were fewer people working in information, culture and recreation.

The number of private sector employees edged up in January, while public sector employment and the number of self-employed workers were little changed.

Among regions, employment rose in Ontario, British Columbia, Nova Scotia and Newfoundland and Labrador. In contrast, there were fewer people working in New Brunswick. Employment was little changed in the remaining provinces.

Employment increased among core-aged men and women (25 to 54 years old). There was little overall employment change among the other demographic groups.


Tuesday February 07 2017
Canadian Trade Surplus Beats Expectations In December
Statistics Canada | Joana Ferreira | joana.ferreira@tradingeconomics.com

Canada's merchandise trade surplus narrowed to CAD 0.92 billion in December 2016 from an upwardly revised CAD 1.01 billion a month earlier, but better than market expectations of a CAD 0.35 billion surplus. Exports were up 0.8 percent on the strength of higher energy product prices; and imports increased 1 percent, mainly on stronger imports of aircraft and industrial machinery.

Exports rose 0.8 percent to a record CAD 46.4 billion in December, as higher sales of energy products were partially offset by lower exports of motor vehicles and parts; metal ores and non-metallic minerals; and metal and non-metallic mineral products. It was the third consecutive monthly gain in exports. Exports excluding energy products were down 2.1 percent. 

Energy product exports rose 15.9 percent to CAD 8.5 billion, the highest value since November 2014. Crude oil and crude bitumen was the main contributor to the increase, up 17.2 percent to CAD 5.7 billion on higher prices. Partially offsetting this increase were lower exports of motor vehicles and parts, down 5.2 percent to CAD 7.4 billion, the lowest level since June 2015. Also, exports of metal ores and non-metallic minerals decreased 12.6 percent to CAD 1.4 billion. 

Among major trading partners, exports rose to the US (0.8 percent), China (3.2 percent), the UK (2.8 percent) and Mexico (0.4 percent).

Total imports were up 1 percent to CAD 45.5 billion, as higher imports of aircraft and other transportation equipment and parts; industrial machinery, equipment and parts; and metal and non-metallic mineral products were partially offset by lower imports of energy products. 

Imports of aircraft and other transportation equipment and parts increased 21.8 percent to CAD 1.5 billion; industrial machinery, equipment and parts rose 6.4 percent to CAD 4.3 billion with all commodity groupings recording gains; and imports of metal and non-metallic mineral products went up 6.3 percent to CAD 3.9 billion. Partially offsetting these gains were lower imports of energy products, down 11.9 percent to CAD 2.2 billion.

Among major trading partners, imports increased from the US (1.3 percent), China (1.6 percent), Germany (2.1 percent) and Mexico (14.7 percent).

Considering 2016 full year, Canada's merchandise trade deficit with the world widened to CAD 26.1 billion from CAD 23.0 billion in 2015, as exports fell 0.7 percent to CAD 521.1 billion, dragged by lower exports of energy products; while imports edged down 0.1 percent to CAD 547.2 billion, due to fewer purchases of energy products; aircraft and other transportation equipment and parts; and metal and non-metallic mineral products.


Friday January 20 2017
Canada Inflation Rate Rises To 1.5% In December
Statistics Canada | Joana Taborda | joana.taborda@tradingeconomics.com

Consumer prices in Canada increased 1.5 percent year-on-year in December of 2016, higher than 1.2 percent in November but below market expectations of 1.7 percent. Higher gasoline and shelter prices were the main contributors to the rise while food cost fell the most since July of 1992.

Year-on-year, the transportation index rose for the fifth consecutive month, up 3 percent in December, after a 1.4 percent gain in November. This increase was led by gasoline prices (5.5 percent following a 1.7 percent decline in November). Meanwhile, air transportation index registered its largest year-over-year gain since August 2013. In contrast, the purchase of passenger vehicles index rose less (2.6 percent from 3 percent).

The clothing and footwear index increased 0.2 percent, following a 1.2 percent decline in November, partly due to the women's clothing index, up 2.0 percent after decreasing 0.2 percent. Additionally, prices for footwear were flat after declining 1.7 percent the previous month. Meanwhile, the children's clothing index (-4.5 percent) posted a year-over–year decrease for the eighth consecutive month.

Consumers paid 1.3 percent less for food. Cost for food purchased from stores decreased 2.8 percent, with the fresh vegetables, fresh fruit, and cereal products indexes contributing most to the decline. In contrast, prices for fish, seafood and other marine products, and prices for sugar and confectionery rose. Prices for food purchased from restaurants were up 2.3 percent, following a 2.5 percent gain in November.

On a monthly basis, consumer prices fell 0.2 percent after declining 0.4 percent in November.

Excluding food and energy, consumer prices fell 0.3 percent on the month and rose 1.6 percent on the year.