Friday August 10 2018
Canada Jobless Rate Falls to 5.8% in July
Statistics Canada | Stefanie Moya | stefanie.moya@tradingeconomics.com

The unemployment rate in Canada decreased to 5.8 percent in July of 2018 from 6.0 percent in the prior month and below market expectations of 5.9 percent. The jobless rate fell back to its lowest on record, as employment increased by 54,000, after creating 31,800 in June and beating market consensus of 17,000, mainly due to gains in part-time work (+82,000) while full-time fell by 28,000.

Employment rose in mainly in Ontario (+61,000), British Columbia (+11,000) and Newfoundland and Labrador (+2,400). In Quebec and other provinces employment was almost unchanged.

There were employment increases in a number of services-producing industries, namely educational services (+37,000); health care and social assistance (+31,000); information, culture and recreation (+12,000) and "other services" (+11,000). On the other hand, employment declined in most goods-producing industries, mainly  manufacturing (-18,000); construction (-12,000) and natural resources (-5,300). 

The number of public sector employees went up by 50,000, while the number of employees in the private sector and self-employed workers were almost unchanged.

In July, employment advanced for the core-aged population (25 to 54) by 35,000, driven by women (+30,000). Also, for women aged 55 and older employment edged up by 12,000, while for men was held steady and also for all youth aged 15 to 24.

The labour force participation rate declined to 65.4 percent from 65.5 percent in June, in line with market consensus.




Friday August 03 2018
Canada Posts Smallest Trade Deficit in 17 Months
Statistics Canada | Stefanie Moya | stefanie.moya@tradingeconomics.com

Canada's merchandise trade deficit narrowed to CAD 0.63 billion in June of 2018 from a downwardly revised CAD 2.72 billion in May and below market expectations of a CAD 2.3 billion gap. It was the smallest trade deficit since January last year, as exports rose 4.1 percent to an all-time high driven by sales of energy products and aircraft while imports fell 0.2 percent.

Total exports increased 4.1 percent month-over-month to CAD 50.7 billion in June, its highest on record. Sales rose boosted by energy products (+7.1 percent to CAD 9.9 billion), its fastest since October of 2014, namely crude oil (+6.6 percent) and refined petroleum energy products (+19.2 percent). Also, sales of aircraft and other transportation equipment and parts picked up (18.9 percent to a record CAD 2.5 billion), mostly due to higher shipments of business jets to both the United States and non-US countries. Additionally, exports advanced for those excluding energy products (+3.4 percent); metal ores and non-metallic minerals (+22.9 percent); motor vehicles and parts (+3.7 percent) and industrial machinery, equipment and parts (+6.1 percent).

Exports to the United States went up 2.5 percent to a record CAD 37.1 billion, mainly on higher sales of passenger cars and light trucks. Exports to countries other than the United States increased 8.7 percent to a record CAD 13.6 billion, mostly on higher shipments to Germany (aircraft), India (metal ores, potash), Belgium (nickel) and Mexico (aircraft).

Imports decreased 0.2 percent to CAD 51.3 billion in June. Purchases dropped mainly due to imports of energy products (-15.1 percent to CAD 2.9 billion) and aircraft and other transportation equipment and parts (-17.1 percent to CAD 2.0 billion), namely aircrafts (-47.9 percent). In addition, purchases declined for refined petroleum energy products (-27.4 percent), as a number of Canadian refineries were temporarily shut down in April and May resumed production in June, reducing the demand for foreign motor gasoline and diesel fuel. On the other hand, imports went up for metal ores and non-metallic minerals (+16.2 percent); consumer goods (+1.2 percent) and basic and industrial chemical, plastic and rubber (+2.7percent).

Imports from the United States rose 0.3 percent to CAD32.9 billion. Imports from countries other than the US declined 1.2 percent to CAD 18.4 billion. Lower shipments from China (cellphones, aircraft) and the United Kingdom (motor gasoline) led the decrease.




Friday July 20 2018
Canada June Inflation Rate at Over 6-Year High
Statistics Canada | Joana Ferreira | joana.ferreira@tradingeconomics.com

Canada's consumer price inflation rose to 2.5 percent year-on-year in June 2018 from 2.2 percent in the previous month, and above market expectations of 2.4 percent. It was the highest rate since February 2012, mainly driven by higher prices for gasoline and food purchased from restaurants.

Transportation prices jumped 6.6 percent in June (vs 5.6 percent in May), driven by higher energy costs (12.4 percent vs 11.6 percent) particularly gasoline (24.6 percent vs 22.9 percent) as sustained increases in crude oil prices and exchange rate pressures continued to impact consumer prices. Additional upward pressure came from: food (1.4 percent vs 1 percent); shelter (2 percent, the same as in May); recreation, education and reading (0.6 percent vs 1.7 percent); clothing and footwear (1.8 percent vs 0.8 percent); health and personal care (1.5 percent, the same as in May); and alcoholic beverages and tobacco products (4.8 percent vs 4.6 percent).

Meanwhile, prices of household operations, furnishings and equipment edged down 0.1 percent in June, after a 0.3 percent gain in May.

On a seasonally adjusted monthly basis, the CPI rose 0.1 percent in June, the same pace as in May and matching market consensus. Six of eight major components increased: food (0.6 percent); clothing and footwear (0.5 percent); alcoholic beverages and tobacco products (0.5 percent); health and personal care (0.2 percent); shelter (0.1 percent); and transportation (0.1 percent). By contrast, a decline was seen in prices of recreation, education and reading (-0.6 percent) and household operations, furnishings and equipment (-0.3 percent).

The BoC's annual core inflation, which excludes volatile items, stood at 1.3 percent in June, unchanged from the May's rate and below market expectations of 1.4 percent.




Wednesday July 11 2018
Canada Raises Interest Rate to 1.5%
BoC | Joana Taborda | joana.taborda@tradingeconomics.com

The Bank of Canada hiked its key overnight rate by 25bps to 1.5%, the highest since 2008. It is the second increase this year as uptick in inflation and strong economic data outweighed intensifying tariff war with the US.

Statement by the Bank of Canada:

The Bank expects the global economy to grow by about 3 ¾ per cent in 2018 and 3 ½ per cent in 2019, in line with the April Monetary Policy Report (MPR). The US economy is proving stronger than expected, reinforcing market expectations of higher policy rates and pushing up the US dollar. This is contributing to financial stresses in some emerging market economies. Meanwhile, oil prices have risen. Yet, the Canadian dollar is lower, reflecting broad-based US dollar strength and concerns about trade actions. The possibility of more trade protectionism is the most important threat to global prospects.

Canada’s economy continues to operate close to its capacity and the composition of growth is shifting. Temporary factors are causing volatility in quarterly growth rates: the Bank projects a pick-up to 2.8 per cent in the second quarter and a moderation to 1.5 per cent in the third. Household spending is being dampened by higher interest rates and tighter mortgage lending guidelines. Recent data suggest housing markets are beginning to stabilize following a weak start to 2018. Meanwhile, exports are being buoyed by strong global demand and higher commodity prices. Business investment is growing in response to solid demand growth and capacity pressures, although trade tensions are weighing on investment in some sectors. Overall, the Bank still expects average growth of close to 2 per cent over 2018-2020.

CPI and the Bank’s core measures of inflation remain near 2 per cent, consistent with an economy operating close to capacity. CPI inflation is expected to edge up further to about 2.5 per cent before settling back to 2 per cent by the second half of 2019. The Bank estimates that underlying wage growth is running at about 2.3 per cent, slower than would be expected in a labour market with no slack.

As in April, the projection incorporates an estimate of the impact of trade uncertainty on Canadian investment and exports. This effect is now judged to be larger, given mounting trade tensions.

The July projection also incorporates the estimated impact of tariffs on steel and aluminum recently imposed by the United States, as well as the countermeasures enacted by Canada. Although there will be difficult adjustments for some industries and their workers, the effect of these measures on Canadian growth and inflation is expected to be modest.

Governing Council expects that higher interest rates will be warranted to keep inflation near target and will continue to take a gradual approach, guided by incoming data. In particular, the Bank is monitoring the economy’s adjustment to higher interest rates and the evolution of capacity and wage pressures, as well as the response of companies and consumers to trade actions.




Friday July 06 2018
Canada Jobless Rate Hits 8-Month High of 6.0%
Statistics Canada | Luisa Carvalho | luisa.carvalho@tradingeconomics.com

The unemployment rate in Canada rose to 6.0 percent in June 2018 from 5.8 percent in the previous month and compared with market expectations of 5.8 percent. It was the highest jobless rate since October, mainly as labor force grew by nearly 76 thousand, the biggest monthly increase in six years. The economy added 31.8 thousand jobs in June, after shedding 7.5 thousand in May and beating market expectations of 24 thousand, mostly part-time jobs (+22.7 thousand). Meantime, full-time positions were up by 9.1 thousand.

Employment increased in Ontario (+35,000), Saskatchewan (+8,300), and Manitoba (+4,100). There was little change in the other provinces.

More people were employed in goods producing industries (+46,600), mainly in construction (+27,200), natural resources (+12,900) and manufacturing (+11,300) while jobs were shed in agriculture (-6100). Meanwhile, employment fell at service producing industries (-14,700), mostly in accommodation and food services (-15,900) and wholesale and retail trade (-14,000).

The number of public sector employees increased (+11,800) and self-employed also rose (+22,000) while the number of private sector employees decreased (-2,000).

In June, employment rose for men aged 55 and older (+13,000), while it held steady for the other demographic groups. 

The labor force participation rate increased to 65.5 percent from 65.3 percent in May, mainly reflecting higher youth participation. In fact, the number of people aged 15 to 24 in the labor force went up by 27,400, rising the participation rate of that group to 64 percent from 63.4 percent in May. This led youth unemployment rate to increase to 11.7 per cent in June, up from 11.1 in May.


Friday July 06 2018
Canada Trade Gap Larger than Expected
Statistics Canada | Agna Gabriel | agna.gabriel@tradingeconomics.com

The Canadian trade deficit widened to CAD 2.77 billion in May of 2018 from CAD 1.86 billion in April and above market expectations of a CAD 2.05 billion. Imports rose 1.7 percent, mainly due to higher purchases of aircraft, while exports edged down 0.1 percent.

Exports from Canada edged down 0.1 percent to CAD 48.3 billion. Shipments of motor vehicles and parts fell 3.6 percent to CAD 7.3 billion in May, due to passenger cars and light trucks (-4.9 percent). Additionally, exports of metal ores and non-metallic minerals (-14.6 percent) drop to its lowest since September of 2016 of CAD 1.3 billion. On the other hand, sales increased for aircraft and other transportation equipment and parts (7.8 percent), mainly due to shipments of other transportation equipment to Saudi Arabia; and forestry products and building and packaging materials (3.1 percent), boosted by higher exports to the United States of lumber, sawmill products and prefabricated finished carpentry (9.8 percent).

Exports to the United States went down 0.2 percent to CAD 35.9 billion and exports to other than the US increased 0.2 percent, particularly to Saudi Arabia and Hong Kong. Meanwhile, shipments decreased to France and Netherlands.

Imports rose 1.7 percent from the previous month to CAD 51.1 billion. Purchases of aircraft and other transportation equipment increased 17.7 percent for the fifth consecutive month to CAD 2.4 billion. Also, imports for refined petroleum energy products advanced 13.9 percent to CAD 1.6 billion, due to a temporarily shut down of the Canadian refineries. On the other hand, arrivals decreased for ships, locomotives, railway rolling stock and rapid transit equipment (-76.6%). Year over year, total imports were up 3.5 percent.

Imports from the United States went up 1 percent in May to CAD 32.6 billion and to other countries than the US rose 2 percent, namely from China, Belgium and Germany; while those from Mexico decreased.


Friday June 22 2018
Canada Inflation Rate Steady at 2.2% in May
Statistics Canada | Luisa Carvalho | luisa.carvalho@tradingeconomics.com

The annual inflation rate in Canada stood at 2.2 percent in May of 2018, the same as in the previous month, missing market expectations of 2.5 percent. Higher prices for shelter and transportation were offset by slowing cost of food, household equipment, clothing & footwear.

Year-on-year, prices advanced faster for shelter (2.0 percent from 1.7 percent in April); transportation (5.6 percent from 4.7 percent), on higher cost of gasoline (22.9 percent from 14.2 percent); and they rebounded for recreation and culture (1.7 percent from -0.2 percent).

Meanwhile, inflation slowed for: food (1.0 percent from 1.8 percent);  household operations, furnishings and equipment (0.3 percent from 1.4 percent); clothing & footwear (0.8 percent from 2.2 percent); health (1.5 percent from 1.6 percent) and alcoholic beverages & tobacco (4.6 percent from 4.9 percent).

On a monthly basis, consumer prices edged up 0.1 percent, compared to a 0.3 percent increase in April and market expectations of a 0.3 percent gain.

The BoC's annual core inflation, which excludes volatile items, eased to 1.3 percent from 1.5 percent in April, missing market expectations of 1.4 percent.


Friday June 08 2018
Canada Jobless Rate Steady at 5.8% for 4th Month
Statistics Canada | Luisa Carvalho | luisa.carvalho@tradingeconomics.com

The unemployment rate in Canada stood at 5.8 percent in May of 2018, the same as in the previous month and matching market expectations. The jobless rate remained at its lowest level since 1976 for the fourth consecutive month. Employment unexpectedly decreased by 7.5 thousand, against market expectations of a 17.5 thousand recovery. A decline in full-time work was only partially offset by an increase in part-time jobs, with main job losses being registered in health care and social assistance, manufacturing and construction.

In May, among the core-age population (25 to 54 years old), employment fell among both men (-19,000) and women (-19,000). It increased for people aged 55 and older (+29,000), and was little changed among youth aged 15 to 24 on both a monthly and year-over-year basis. The unemployment rate for this age group held steady at 11.1% in May.

Employment increased in Prince Edward Island (+800), while it decreased in British Columbia (-12,000) and Nova Scotia (-3,600). There was little change in the other provinces.

There were employment increases in four industries in May: accommodation and food services (+18,000); professional, scientific and technical services (+17,000); transportation and warehousing (+12,000); and finance, insurance, real estate, rental and leasing (+12,000). At the same time, employment declined in health care and social assistance (-24,000), manufacturing (-18,000), construction (-13,000), and "other services"(-12,000).

There was little change in the number of employees in both the private and public sectors, as well as the number of self-employed workers.


Wednesday June 06 2018
Canada Trade Deficit Narrows in April
Statistics Canada | Stefanie Moya | stefanie.moya@tradingeconomics.com

Canada's merchandise trade deficit narrowed to CAD 1.9 billion in April of 2018 from a downwardly revised CAD 3.9 billion in March and well below market expectations of a CAD 3.4 billion gap. Exports increased 1.6 percent, boosted by higher sales of metal and non-metallic mineral products, consumer goods and energy products. Meantime, imports declined 2.5 percent, after reaching a record high in March, mainly due to lower purchases of motor vehicles and parts and consumer goods.

Total exports advanced 1.6 percent month-over-month to a record high CAD 48.6 billion in April. Sales went up mostly due to metal and non-metallic mineral products (+9.1 percent to CAD 5.8 billion), namely unwrought precious metals and precious metal alloys unwrought gold to Hong Kong. Also, exports of consumer goods increased 5.4 percent to CAD 6.2 billion and sales of pharmaceutical and medicinal products rose 33.3 percent, mostly  due to higher shipments to the United States. In addition, sales increased for other food (+8.3 percent), mainly higher exports of dried peas to Asia; energy products (+2.3 percent) due to crude oil and crude bitumen (+4.9 percent). 

Exports to the United States were up 3.2 percent, due to higher sales of crude oil and crude oil bitumen. Exports to countries other than the US decreased 3.0 percent, mostly on lower shipments to the UK (crude oil), Saudi Arabia (other transportation equipment), Japan (coal) and South Korea (aircraft and coal).

Imports dropped 2.5 percent to CAD 50.5 billion in April, after reaching a record high in March. The biggest contribution for the decline was given by motor vehicles and parts (-5.8 percent to CAD 9.7 billion), as passenger cars and light trucks fell 8.9 percent, returning to normal levels following higher light trucks import levels in March and motor vehicle engines and motor vehicle parts (-4.4 percent). Additionally, purchases decreased for consumer goods (-4.9 percent to CAD 10.5 billion), namely pharmaceutical and medicinal products mostly on lower imports from Switzerland, Belgium and the United States. On the other hand, imports picked up for energy (+8.5 percent to CAD 3.4 billion), mostly refined petroleum energy products (+28.5 percent to a record CAD 1.4 billion). Temporary shutdowns in Canadian refineries in April led to higher imports of motor gasoline and diesel fuel to meet domestic demand. 

Imports from the US edged down 1.4 percent, dragged by lower purchases of passenger cars and light trucks. Imports from countries other than the US went down 4.3 percent, mainly on lower imports from China (computers).


Thursday May 31 2018
Canada's Economy Expands the Least Since 2016
Statistics Canada | Luisa Carvalho | luisa.carvalho@tradingeconomics.com

Canada gross domestic product grew 0.3 percent in the first quarter, following an increase of 0.4 percent in each of the previous two quarters. It was the slowest expansion since a 0.3 percent contraction was seen in the second quarter of 2016. Final domestic demand rose by 0.5 percent. Growth was moderated by a deceleration in household spending, lower exports of non-energy products and a decline in housing investment (-1.9 percent). Expressed at an annualized rate, real GDP was up 1.3 percent in the first quarter, but below market expectations of a 1.8 percent growth.

Household spending grew 0.3 percent in the first quarter of 2018, the slowest pace since the first quarter of 2015. Growth was driven by increased outlays on services (+0.5 percent). Household spending on goods was unchanged, following 11 consecutive quarterly increases.

Investment in machinery and equipment rose 4.2 percent, with medium and heavy trucks, buses and other motor vehicles (+12.5 percent) and industrial machinery and equipment (+3.9 percent) contributing to the growth. Intellectual property products rose 3.3 percent, as mineral exploration and evaluation (+8.0 percent) rebounded and software (+3.2 percent) accelerated. Investment in non-residential structures increased 1.5 percent.

Investment in housing fell 1.9 percent, the largest decline since the first quarter of 2009, due to a drop in ownership transfer costs (-13.5%). Lower resale activity coincided with new mortgage stress measures introduced nationwide in January. Business outlays on new construction slowed to 1.2 percent growth, while renovations increased 1.4 percent.

Businesses added CAD 15.2 billion to their inventories in the first quarter, following an accumulation of CAD 15.9 billion in the previous quarter. Wholesalers (+CAD 5.4 billion), manufacturers (+CAD 4.0 billion) and retailers (+CAD 2.6 billion) all added to their stocks. Farm inventories grew by CAD 567 million, compared with an accumulation of CAD 2.7 billion in the fourth quarter of 2017. The economy-wide stock-to-sales ratio increased from 0.760 to 0.765 in the first quarter.

Export volumes rose 0.4 percent after increasing 1.0 percent in the fourth quarter of 2017. Exports of crude oil and crude bitumen (+9.9 percent) largely contributed to the gains. Exports of services grew 1.7 percent in the first quarter, following a 1.3 percent increase in the previous quarter. Imports rose by 1.2 percent in the first quarter, with similar increases in goods and services.

Growth in imports of goods was led by passenger cars and light trucks (+5.9 percent), tires, motor vehicle engines and parts (+6.0 percent) and basic chemicals and industrial chemical products (+8.6 percent).Imports of services rose 1.1%, as those of commercial (+1.3 percent), transportation (+1.4 percent) and travel (+0.6 percent) services all increased.

Business investment in machinery and equipment (+4.2 percent) and intellectual property products (+3.3 percent) increased at a faster pace than in the fourth quarter of 2017.