Friday December 02 2016
Canada Unemployment Rate Falls to 6.8%
Statistics Canada | Joana Taborda | joana.taborda@tradingeconomics.com

The jobless rate in Canada declined to 6.8 percent in November of 2016 from 7 percent in the previous three months, beating market expectations of 7 percent. It is the lowest unemployment rate in five months as the economy added 10.7 thousand jobs and fewer people looked for work.

Part-time jobs rose by 19.4 thousand while full-time decreased by 8.7 thousand. More people were employed in the finance, insurance, real estate and leasing industry, in information, culture and recreation, in the "other services" industry and in agriculture. On the other hand, declines were observed in construction, in manufacturing, as well as in transportation and warehousing.

There were fewer self-employed workers in November, while the number of employees was little changed in both the public and private sectors.

In November, employment increased for men in the 25 to 54 age group and for men 55 and older, while it declined for women 55 and older. There was little change among the other demographic groups.

Provincially, employment rose in Nova Scotia while it fell in Alberta.




Wednesday November 30 2016
Canada GDP Growth At 2-Year High of 0.9% in Q3
Statistics Canada | Joana Taborda | joana.taborda@tradingeconomics.com

The Canadian economy expanded 0.9 percent on quarter in the three months to September of 2016, following a downwardly revised 0.3 percent contraction in the previous period. It is the highest growth rate since the second quarter of 2014, boosted by exports of energy while domestic demand slowed. Expressed at an annualized rate, the economy expanded 3.5 percent, better than market expectations of 3.4 percent.

Exports increased 2.2 percent, following a 3.9 percent drop in the previous period. Growth was driven by a 6.1 percent increase in the energy sector, following a 5.1 percent decline in the second quarter as a result of the Fort McMurray wildfires. Exports of goods grew 2.3 percent, while services advanced 1.4 percent. Imports went up 0.8 percent, following a 0.4 percent rise in the previous period. 

Growth in household final consumption expenditure was 0.6 percent, a similar pace to the previous two quarters. The growth was mainly in services (+0.9 percent). Expenditures on goods increased 0.3 percent despite a 0.6 percent decline in outlays on durables, particularly motor vehicles. Investment in residential structures (-1.4 percent) fell for the first time since the first quarter of 2014.

Government final consumption expenditure declined 0.3 percent following a 1.3 percent increase in the second quarter.

Business investment on machinery and equipment fell 3.2 percent in the third quarter, while intellectual property products declined 4.5 percent on reduced investment in mineral exploration and evaluation (-26.3 percent). Investment in non-residential structures rose 3.7 percent, largely due to the import of a module destined for the Hebron offshore oil project in Newfoundland and Labrador.

Businesses added $4.8 billion to inventories, as manufacturing, wholesale and retail inventory levels all increased. Retail inventories of motor vehicles grew by $3.0 billion in the third quarter.




Tuesday November 29 2016
Canadian Current Account Gap Narrows In Q3
Statistics Canada | Yekaterina Guchshina | yekaterina@tradingeconomics.com

Canada current account gap narrowed CAD 0.7 billion to CAD 18.299 billion in the third quarter of 2016, following three straight quarterly increases.

The deficit on international trade in goods narrowed CAD 2.7 billion to CAD 8.3 billion, following a record gap of CAD 11.1 billion in the second quarter. Exports increased by CAD 5.9 billion to CAD 130.1 billion. It was the highest growth since the first quarter of 2014. mainly driven by energy products sales (+CAD 2.3 billion). In addition, exports of metal and non-metallic mineral products increased by CAD 1.0 billion, mostly from higher prices. Consumer goods were up CAD 0.7 billion on higher volumes, following a CAD 1.6 billion reduction in the second quarter. Total imports rose CAD 3.2 billion to CAD 138.4 billion. The largest increase was in industrial machinery, equipment and parts, up CAD 2.6 billion on higher volumes. Energy products and motor vehicles and parts also contributed to the gain, with both categories posting a CAD 0.5 billion rise in the quarter. In contrast, aircraft and other transportation equipment and parts fell CAD 1.4 billion on lower volumes, following a CAD 0.9 billion increase in the previous quarter.

On a geographical basis, the goods surplus with the United States increased CAD 3.1 billion to CAD 8.4 billion, led by stronger exports of energy products. In contrast, the deficit with non-US countries rose CAD 0.4 billion to CAD 16.8 billion, mostly reflecting a large import of industrial machinery, equipment and parts from South Korea destined for the Hebron offshore oil project in Newfoundland and Labrador.

The overall deficit on international trade in services edged down CAD 0.2 billion to CAD 5.3 billion in the third quarter. This was the sixth consecutive quarterly reduction in the services deficit, mostly led by a lower travel deficit. The travel deficit was down CAD 0.1 billion to CAD 3.5 billion, as non-residents increased their spending in Canada as a result of more visits. This was partially offset by larger payments made by Canadians travelling abroad. The travel deficit has diminished by CAD 1.3 billion since the first quarter of 2015.

The investment income deficit increased CAD 1.6 billion to CAD 3.5 billion. Profits earned by foreign direct investors on their Canadian assets were up CAD 1.4 billion, nearly returning to 2015 year-end levels. Meanwhile, profits earned by Canadian direct investors on their assets abroad were largely unchanged.
Payments on foreign holdings of Canadian securities increased CAD 0.3 billion, following a decline in the second quarter. Revenues from holdings of foreign securities were up by CAD 0.1 billion.




Friday November 18 2016
Canada Inflation Rate Up to 1.5%
Statistics Canada | Joana Taborda | joana.taborda@tradingeconomics.com

Consumer prices in Canada increased 1.5 percent year-on-year in October of 2016, following a 1.3 percent rise in September and in line with market estimates. Higher transport and shelter prices boosted inflation while food prices declined for the first time since January of 2000.

Year-on-year, transport cost rose 3 percent, following a 2.3 percent gain in September: gasoline prices went up 2.5 percent after declining 3.2 percent and purchase of passenger vehicles rose less (+4.4 percent compared to 5.8 percent) but remained the top upward contributor to the 12-month change in the transportation index.

Shelter prices increased the most since January of 2015 (+1.9 percent), following a 1.7 percent gain in September. The homeowners' replacement cost index was up 4.1 percent and property taxes rose 2.8 percent while the natural gas index was down 3.4 percent.  

Food prices posted their first decline since January of 2000, down 0.7 percent after rising 0.1 percent in September. Prices for food purchased from stores recorded their largest decline since July of 1992, down 2.1 percent after decreasing 0.9 percent. Prices of fresh fruit (-7.4 percent ), meat (-1.7 percent ), dairy products (-2.4 percent ) and fresh vegetables (-3.6 percent ) declined while cost of fish, seafood and other marine products rose. Prices for food purchased from restaurants were up 2.6 percent . 

On a monthly basis, consumer prices went up 0.2 percent after edging up 0.1 percent in September.


Excluding food and energy, consumer prices rose 0.2 percent on the month and 1.7 percent on the year.





Friday November 04 2016
Canada Jobless Rate Remains at 7% in October
Statistics Canada | Mojdeh Kazemi | mojdeh@tradingeconomics.com

Unemployment Rate in Canada remained unchanged at 7 percent in October of 2016 as more people participated in the labour market (+46K). Employment rose by 44K (or 0.2 percent).

In the 12 months to October, employment increased by 140,000 (or 0.8 percent), mostly in part-time work (+124,000 or +3.6 percent). At the same time, the total number of hours worked was little changed.

Employment among youths aged 15 to 24, increased by 26,000 in October, with all of the gains in part-time work. The unemployment rate for this group was virtually unchanged at 13 percent as more youth participated in the labour market. Employment for men aged 25 to 54 increased slightly (+16,000) and their unemployment rate was little changed at 6.4 percent, while for both groups of women aged 25 to 54 and people aged 55 and older, employment was virtually unchanged. 

Provincially, employment rose in Ontario and British Columbia, while it fell in Newfoundland and Labrador. Meantime, In Quebec, employment was virtually unchanged in October, following two consecutive months of gains.

On a year-over-year basis, employment increased in construction (by 47,000); educational services (by 34,000), private sector (by 101,000) and other services (by 22,000). In wholesale and retail trade, public administration and also business, building, and other support services was little changed, while it fell in natural resources (by -20,000).  


Friday November 04 2016
Canada Posts Record Trade Deficit in September
Statistics Canada | Joana Taborda | joana.taborda@tradingeconomics.com

The Canadian economy recorded a CAD 4.1 billion trade gap in September of 2016, following an upwardly revised CAD 1.99 billion shortfall in the previous month. It is the biggest gap on record, due to a one-off import of machinery for an oil project.

Imports increased 4.7 percent to a record CAD 47.6 billion in September, boosted by a 71.4 percent jump in purchases of industrial machinery, equipment and parts. The gain was attributable to one large import of a module from South Korea destined for the Hebron offshore oil project in Newfoundland and Labrador. No additional high-value import transactions are expected for this project. Excluding the CAD 2.9 billion change in imports of industrial machinery, equipment and parts, total imports would have decreased 1.6%, resulting in a trade deficit of CAD 1.2 billion.

Exports edged up 0.1 percent to CAD 43.5 billion as a 0.9 percent increase in prices was mostly offset by a 0.8 percent decrease in volumes. 

Considering the third quarter, exports rose 5 percent to CAD 130.3 billion, the strongest increase since the first quarter of 2014. Imports went up 2.4 percent to CAD 138.5 billion. Consequently, the trade deficit narrowed to CAD 8.2 billion from a record of CAD 11.1 billion in the previous period. 




Friday October 21 2016
Canada Inflation Rate Up to 1.3% in September
Statistics Canada | Joana Taborda | joana.taborda@tradingeconomics.com

Consumer prices in Canada increased 1.3 percent year-on-year in September of 2016, following a 1.1 percent gain in August but below market expectations of a 1.5 percent rise. Cost of shelter and transportation contributed the most to the rise while food inflation was the lowest since February of 2000.

Year-on-year, transport cost rose 2.3 percent, following a 0.3 percent gain in August. Gasoline prices posted a smaller year-over-year decrease in September (-3.2 percent) than in August (-11.5 percent). The purchase of passenger vehicles index increased 5.8 percent in September, after posting a 5.2 percent gain in August.

Shelter prices went up 1.7 percent, the same as in the previous month. 

The clothing and footwear index rose 0.1 percent, following a 0.4 percent decline in August. This turnaround was partly attributable to increases in the men's clothing index and the women's clothing index. For the fifth consecutive month, shoppers paid less for children's clothing.

Food prices were up 0.1 percent after rising 1.1 percent in August. Prices for food purchased from stores recorded their first year-over-year decline since March 2008, down 0.9 percent. As a result of the decrease in September, food prices in stores returned to a level last recorded in January 2015.

Following gains in the price of some fresh vegetables in the fall and winter of 2015/2016, and subsequent monthly declines in those prices, the fresh vegetables index (-2 percent) was down for the first time since January 2013. On a year-over-year basis, the price of cereal products (-4.9 percent), which include rice, pasta, flour and breakfast cereal, fell for a third consecutive month. The condiments, spices and vinegars index (-5.3 percent) and the dairy products index (-1.1 percent) were down.

Prices for food purchased from restaurants were up 2.5% in the 12 months to September, matching the rise in August.

On a monthly basis, consumer prices increased 0.1 percent, following a 0.2 percent decline in August.

Excluding food and energy, consumer prices rose 0.4 percent on the month and 2 percent on the year.



Wednesday October 19 2016
Canada Keeps Monetary Policy Steady in October
Bank of Canada | Joana Taborda | joana.taborda@tradingeconomics.com

The Bank of Canada left its benchmark overnight rate unchanged at 0.5 percent at its October 2016 meeting as widely expected. Policymakers said the growth outlook is lower than projected due to slower housing resale activity and exports and that inflation remains below expectations. 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:

The global economy is expected to regain momentum in the second half of this year and through 2017 and 2018. After a weak first half, the US economy in particular is strengthening: solid consumption is being underpinned by strong employment growth and robust consumer confidence. However, because of elevated uncertainty, US business investment is on a lower track than expected.

Looking through the choppiness of recent data, the profile for growth in Canada is now lower than projected in July’s Monetary Policy Report (MPR). This is due in large part to slower near-term housing resale activity and a lower trajectory for exports. The federal government’s new measures to promote stability in Canada’s housing market are likely to restrain residential investment while dampening household vulnerabilities. Recent export data are improving but are not strong enough to make up for ground lost during the first half of 2016, despite the effects of the Canadian dollar’s past depreciation. Growth in exports over 2017 and 2018 are projected to be slower than previously forecast, due to lower estimates of global demand, a composition of US growth that appears less favourable to Canadian exports, and ongoing competitiveness challenges for Canadian firms.

After incorporating these weaker elements, Canada’s economy is still expected to grow at a rate above potential starting in the second half of 2016, supported by accommodative monetary and financial conditions and federal fiscal measures. As the economy continues to adjust to the oil price shock, investment in the energy sector appears to be bottoming out. Non-resource activity is growing solidly, particularly in the services sector. Household spending continues to rise, along with employment and incomes outside of energy-intensive regions. The Bank expects Canada’s real GDP to grow by 1.1 per cent in 2016 and about 2 per cent in both 2017 and 2018. This projection implies that the economy returns to full capacity around mid-2018, materially later than the Bank had anticipated in July.

Measures of core inflation remain close to 2 per cent as the effects of past exchange rate depreciation and excess capacity continue to offset each other. Total CPI inflation is tracking slightly below expectations because of temporary weakness in prices for gasoline, food, and telecommunications. The Bank expects total CPI inflation to be close to 2 per cent from early 2017 onwards, when these temporary factors will have dissipated, but downward pressure on inflation will continue while economic slack persists.

Given the downward revision to the growth profile and the later closing of the output gap, the Bank considers the risks around its updated inflation outlook to be roughly balanced, albeit in a context of heightened uncertainty. Meanwhile, the new housing measures should mitigate risks to the financial system over time. At present, the Bank’s Governing Council judges that the overall balance of risks is still in the zone for which the current stance of monetary policy is appropriate, and the target for the overnight rate remains at 1/2 per cent.




Friday October 07 2016
Canada Jobless Rate Steady at 7% in September
Statistics Canada | Mojdeh Kazemi | mojdeh@tradingeconomics.com

The unemployment in Canada was recorded at 7 percent in September of 2016 unchanged from August. The figure came in line with consensus as more people participated in the labour market (+69K) while employment rose (+68K) and the number of unemployed persons barely changed.

Unemployment barely changed from August up by 2,000 to 1,363.1 thousand while  employment rose by 67,200 to 18,116.7 thousand as part-time added 44.1 thousand jobs and full-time rose by 23,000 thousand. Meantime, labour force increased by 69,000 to 19,479.7 thousand.

Compared with September of 2015, employment rose by 139,000 (or +0.8 percent), with most of the gains in part-time work. Over the same period, the total number of hours worked edged up 0.2%.

Employment among youths aged 15 to 24 remained at 13.2 percent. The unemployment rate for this group was essentially unchanged compared with 12 months earlier. Over the same period, fewer youths were working (-35,000 or -1.4 percent). Employment among both men and women aged 25 to 54 held steady, while there were 19,000 more men aged 55 and older working in September.

Provincially, employment rose in Quebec, Alberta and New Brunswick. There was little change in the other provinces.

On a year-over-year basis, employment was up in public administration (by 22,000); educational services (by 17,000); industry (by 25,000); transportation and warehousing (by 8,300). In contrast, there were fewer people working in health care and social assistance (by -14,000) in September. 



Wednesday October 05 2016
Canada Trade Gap Smallest Since January
Statistics Canada | Mojdeh Kazemi | mojdeh@tradingeconomics.com

Canada's merchandise trade deficit was recorded at CAD 1.94 billion in August 2016 compared to downwardly revised 2.19 CAD billion shortfall in a month earlier, better than market consensus of CAD 2.6 billion gap. It was the smallest deficit since January as exports rose 0.6 percent while imports were largely unchanged.

Total exports were up 0.6 percent to $43.4 billion in August, with 6 of 11 sections recording gains. The overall rise was attributable to higher exports of consumer goods, metal and non-metallic mineral products, and energy products. These increases were offset by lower exports of motor vehicles and parts, and aircraft and other transportation equipment and parts. In August, exports excluding energy products were unchanged from the previous month. Year over year, total exports were down 2.5 percent.

Exports of consumer goods rose 7 percent as pharmaceutical and medicinal products led the increase, up 23.7 percent, the highest level since January 2016. Sales of Metal and non-metallic mineral products, up 6.2 percent led by unwrought precious metals and precious metal alloys, up 13 percent. Exports of energy products also contributed to the overall increase in August, rising 4.4 percent. In contrast, exports of motor vehicles and parts fell 5.8 percent following a 7.3 percent increase in July. Passenger cars and light trucks were the main source of the decline, down 8.9 percent. This decrease coincided with atypical shutdowns at some Canadian automobile manufacturing plants in August. Exports of aircraft and other transportation equipment and parts also fell, down 16.2 percent. Exports of aircraft contributed the most to the decline, decreasing 34.8 percent, the lowest level since January 2016.

Total imports for August were largely unchanged at $45.3 billion, as advances in five sections were offset by declines in the six remaining sections. Higher imports of metal and non-metallic mineral products, consumer goods, and motor vehicles and parts were counterbalanced by lower imports of energy products. On a year-over-year basis, imports were down 3.3 percent.

Imports of metal and non-metallic mineral products rose 8.6 percent, the strongest monthly gain since August 2015. Unwrought precious metals and precious metal alloys led the advance, up 52.7 percent, mainly on higher imports of gold and silver.  Imports of consumer goods rose 0.9 percent, as volumes were up 2.1 percent, while prices decreased 1.2 percent. Imports of pharmaceutical and medicinal products contributed the most to the increase, up 10.0percent. Purchases of motor vehicles and parts also increased, up 0.8percent as passenger cars and light trucks rose 3.8 percent to a record high. This gain was partly offset by imports of medium and heavy trucks, buses and other motor vehicles, which fell 16.9 percent, the lowest level since December 2013. Offsetting these gains, imports of energy products fell 16.6 percent, following five consecutive monthly increases. Imports of crude oil and crude bitumen decreased 16.3 percent on lower volumes (-8.7 percent) and prices (-8.3 percent). Imports of refined petroleum energy products also declined, down 23.4 percent, mostly on lower volumes.