Friday September 08 2017
Canada Jobless Rate Drops to New 2008 Low of 6.2%
Statistics Canada | Joana Taborda | joana.taborda@tradingeconomics.com

The unemployment rate in Canada fell to 6.2 percent in August of 2017 from 6.3 percent in July, beating market expectations of 6.3 percent. It reached a new low since October of 2008, the month prior to the 2008-2009 labour-market downturn. The economy added 22 thousand jobs, as more people were working in finance, insurance, real estate, rental and leasing as well as in transportation and warehousing.

An increase in the number of people working part time (+110,000) was mostly offset by a decline in the number of people employed full time (-88,000). While the increase in part-time employment was spread across the age groups, most of the decrease in full-time employment occurred for youth aged 15 to 24. The overall employment decline for youth was accompanied by a notable decrease in their labour force participation.

In the 12 months to August, employment rose by 374,000 (+2.1%), with gains in both full-time (+213,000 or +1.5%) and part-time work (+161,000 or +4.6%). Over this period, the number of hours worked increased by 2.2%.

Provincially, Ontario was the lone province with a notable employment gain in August. Employment declined in Nova Scotia and was little changed in the other provinces.

In August, more people were working in finance, insurance, real estate, rental and leasing as well as in transportation and warehousing. At the same time, employment fell in manufacturing, in the "other services" industry and in natural resources.

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




Wednesday September 06 2017
Canada Unexpectedly Hikes the Key Rate to 1.0%
Bank of Canada |Luisa Carvalho | luisa.carvalho@tradingeconomics.com

The Bank of Canada unexpectedly raised its benchmark overnight rate by 25 bps to 1 percent at its September 6th 2017 meeting, surprising markets who expected no changes. It is the second consecutive rise in borrowing cost as recent economic data have been stronger than expected, supporting the Bank’s view that growth in Canada is becoming more broadly-based and self-sustaining. The Bank Rate was also increased by 25 bps 1.25 percent and the deposit rate by 25 bps to 0.75 percent.


Statement by the Bank of Canada:

Recent economic data have been stronger than expected, supporting the Bank’s view that growth in Canada is becoming more broadly-based and self-sustaining. Consumer spending remains robust, underpinned by continued solid employment and income growth. There has also been more widespread strength in business investment and in exports. Meanwhile, the housing sector appears to be cooling in some markets in response to recent changes in tax and housing finance policies. The Bank continues to expect a moderation in the pace of economic growth in the secondhalf of 2017, for the reasons described in the July Monetary Policy Report (MPR), but the level of GDP is now higher than the Bank had expected.

The global economic expansion is becoming more synchronous, as anticipated in July, with stronger-than-expected indicators of growth, including higher industrial commodity prices. However, significant geopolitical risks and uncertainties around international trade and fiscal policies remain, leading to a weaker US dollar against many major currencies. In this context, the Canadian dollar has appreciated, also reflecting the relative strength of Canada’s economy.

Given the stronger-than-expected economic performance, Governing Council judges that today’s removal of some of the considerable monetary policy stimulus in place is warranted. Future monetary policy decisions are not predetermined and will be guided by incoming economic data and financial market developments as they inform the outlook for inflation. Particular focus will be given to the evolution of the economy’s potential, and to labour market conditions. Furthermore, given elevated household indebtedness, close attention will be paid to the sensitivityof the economy to higher interest rates. 





Wednesday September 06 2017
Canada Trade Gap Narrows in July
Statistics Canada |Luisa Carvalho | luisa.carvalho@tradingeconomics.com

Canada reported a CAD 3.0 billion trade deficit in July of 2017, following an upwardly revised CAD 3.8 billion gap in June and better than market expectations of a CAD 3.1 billion shortfall. Exports fell 4.9 percent to CAD 44.1 billion and imports declined 6 percent to CAD 47.2 billion affected by widespread price decreases as Canadian dollar appreciated sharply against USD in July.

Exports decreased 4.9 percent to CAD 44.1 billion in July 2017 from a downwardly revised CAD 46.4 billion in the previous month. The biggest declines were observed in shipments of motor vehicles and parts (-9.6 percent), and aircraft and other transportation equipment and parts (-18.3 percent). Sales excluding energy products were down 5.2%. 

Exports to the United States fell 3.2 percent to CAD 33.3 billion, dragged down by lower sales of passenger cars and light trucks. Also, exports to the countries other than the United States were down 10 percent with biggest decreases reported for: unwrought gold to the United Kingdom;  copper, canola and seafood to Japan; and personal transportation equipment to Saudi Arabia.

Total imports declined 6 percent to CAD 47.2 billion, first drop in seven mointh, from an upwardly revised CAD 50.2 billion in the previous month. This occurred as the Canadian dollar gained 3.6 cents US relative to the American dollar from June to July. The decline was partially attributable to aircraft and other transportation equipment and parts (-35.2 percent), as well as motor vehicles and parts (-4.4 percent).

Imports from the United States went down 6.7 percent to CAD 30.4 billion, led by lower aircraft imports. Imports from countries other than United States were down 4.7 percent, with biggest decreases reported for bauxite from Brazil and motor vehicle parts from Mexico. 

Year-on-year, exports were up 2.2% while imports rose 4 percent.




Thursday August 31 2017
Canada GDP Growth at Near 6-Year High in Q2
Statistics Canada | Joana Taborda | joana.taborda@tradingeconomics.com

The Canadian economy expanded 1.1 percent on quarter in the three months to June of 2017, following a 0.9 percent growth in the previous period. It is the highest growth rate since the third quarter of 2011, mainly boosted by household consumption and exports of goods. The cumulative growth for the first two quarters of the year was 2 percent, the strongest since 2002.

Household spending on goods advanced 1.9 percent, with outlays on durables, semi-durables and non-durables all increasing. Outlays on services rose 0.5 percent Overall, household final consumption expenditure advanced 1.1 percent in the second quarter, after increasing 1.2 percent the previous quarter.

Growth in export volumes accelerated to 2.3 percent, following a 0.4 percent gain in the first quarter. Exports of goods rose 2.8 percent with energy products (+9.2 percent) contributing the most to the increase. Exports of services edged down 0.1 percent as commercial services fell 0.6 percent.

Imports rose 1.8 percent, about half the pace of the previous quarter. Imports of goods increased 2.5 percent while those of services declined 1 percent.

Business gross fixed capital formation slowed to 0.5 percent growth, following a 3.1 percent increase in the first quarter. The deceleration was mostly attributable to lower investment in housing (-1.2 percent). Business investment in non-residential structures rose 2.4 percent after increasing 1 percent in the first quarter.

Businesses accumulated another CAD 11.5 billion in inventories in the second quarter, after adding CAD 10.5 billion to their stocks in the first. Despite the strong inventory accumulation, the stock-to-sales ratio declined 0.8 percent.

Expressed at an annualized rate, real GDP rose 4.5 percent in the second quarter, above 3.7 percent in the previous period and market expectations of 3.7 percent. It is the strongest growth rate since the third quarter of 2011.




Wednesday August 30 2017
Canada Current Account Gap Widens Less than Expected
Statistics Canada | Luisa Carvalho | luisa.carvalho@tradingeconomics.com

Canada's current account gap increased to CAD 16.3 billion in second quarter of 2017 from a downwardly revised CAD 12.9 billion in the previous period, lower than market expectations of a CAD 17.4 billion shortfall. The goods deficit widened as imports rose the most in nine years, led by motor vehicles and parts.

The goods balance posted a CAD 5.2 billion deficit, following a CAD 2 billion deficit. Total exports of goods rose CAD 4.4 billion to CAD 143.3 billion. Metal and non-metallic mineral products, led by precious metals, were up CAD 1.4 billion and motor vehicles and parts advanced CAD 1.3 billion due to stronger exports of passenger cars and light trucks. Moderating these gains was a decline in exports of energy products of CAD 0.7 billion, as lower crude petroleum prices more than offset higher volumes. Total imports of goods were up CAD 7.7 billion to CAD 148.5 billion in the second quarter, the largest quarterly growth in nine years, with widespread gains throughout commodity sectors. Among the largest rises, consumer goods rose CAD 1.2 billion due to higher prices and motor vehicles products saw a record increase of CAD 1.0 billion, namely parts.

On a geographical basis, the goods surplus with the United States was reduced by CAD 1.5 billion to CAD 10.4 billion, after three straight quarters of increases. Meanwhile, the deficit with non-US countries increased CAD 1.8 billion, mainly reflecting a higher deficit with China.

The services deficit narrowed CAD 0.2 billion to CAD 5.5 billion, as the commercial services trade surplus was higher. Imports of commercial services edeged down CAD 0.1 billion while exports were up. For transport services, receipts and payments both increased by CAD 0.2 billion. Receipts and payments on travel services were both up slightly. There was lower spending by Canadians travelling to the United States in the quarter, but higher payments on visits to other countries.

The investment income deficit, the difference between incomes generated on Canada's international assets and liabilities, grew CAD 0.5 billion to CAD 4.6 billion in the second quarter. Interest and dividend paid to non-residents on their holdings of Canadian securities were up CAD 0.7 billion, led by higher payments on corporate bonds. There were also higher interest payments on loans and deposits held in Canada by non-residents. On the receipts side, profits earned by Canadian direct investors on their assets abroad were up CAD 0.6 billion, moderating the overall increase in the investment income deficit in the quarter.




Friday August 18 2017
Canada Inflation Rate Up to 1.2% in July
Statistics Canada | Joana Taborda | joana.taborda@tradingeconomics.com

Consumer prices in Canada increased 1.2 percent year-on-year in July of 2017, higher than a 1 percent rise in June and in line with market expectations. Transportation and shelter cost made the highest upward contributions while prices of household operations, furnishings and equipment and clothing and footwear fell.

Year-on-year, transportation costs rose 1.9 percent, following a 0.6 percent increase in June. Gasoline prices contributed most to the gain in prices, as well as to their acceleration, rising 4.6 percent after 1.4 percent decline in June. The purchase of passenger vehicles index increased 0.2 percent after declining 0.2 percent. At the same time, passenger vehicle insurance premiums rose at a slower rate.

The shelter index increased 1.3 percent after rising 1.6 percent in June. Homeowners' replacement costs contributed the most to the gain in prices, rising 4.1 percent. Prices for natural gas (+9.7 percent) increased at a slower rate. Meanwhile, the electricity index recorded its largest decrease since April 2003, down 9.1 percent, following a 5.3 percent decline in June. The decline at the national level largely reflected legislated price declines in Ontario.

Consumer prices for food rose 0.6 percent, matching the gain in June.

The health and personal care index increased 2.2 percent, its largest gain since May 2011. This increase is partly attributable to the non-prescribed medicines index, which grew 4.4 percent after a 1.2 percent increase in June.

In July, the household operations, furnishings and equipment index declined on a year-over-year basis for the first time since August 2006, down 0.1 percent. The furniture index contributed the most to this decline, down 2.9 percent. The telephone services index increased 0.1 percent  after rising 2 percent. Prices for household appliances (-2 percent) declined less.

Clothing and footwear prices decreased 0.1 percent after a 1.7 percent decline in June. Prices for men's clothing and women's clothing declined less. At the same time, prices for footwear rose 1.6 percent in July, following a 0.3 percent increase in June.

On a monthly basis, consumer prices were flat after edging down 0.1 percent in June.

The core index rose 0.9 percent on the year, the same as in June and remaining the lowest annual core inflation since February of 2011.





Friday August 04 2017
Canada Trade Deficit Biggest in 9 Months
Statistics Canada |Luisa Carvalho |Luisa Carvalho | luisa.carvalho@tradingeconomics.com

Canada's merchandise trade balance with the world posted a CAD 3.6 billion deficit in June, widening from a CAD 1.4 billion deficit in May. Exports fell 4.3 percent to CAD 46.5 billion in June. This sharp decrease was mainly due to lower exports of unwrought gold and energy products. Imports edged up 0.3 percent to CAD 50.1 billion, led by an increase in gold bullion.

Total exports declined 4.3 percent to a CAD 46.5 billion. Metal and non-metallic mineral products (-14.9 percent) and energy products (-9.2 percent) were the largest contributors to the decrease. Sales excluding energy declined 3.4 percent.

Exports to the United States fell 4.5 percent to CAD 34.5 billion. In addition, exports to countries other than the United States were also down 4 percent, mainly due to lower exports of unwrought gold to the United Kingdom as well as lower exports of coal to Japan.

Total imports also went up 0.3 percent to a new record high of CAD 50.1 billion. The main positive contributions came from metal ores and non-metallic minerals (39.1 percent); other metal ores and concentrates  (48.8 percent) and aircraft and other transportation equipment and parts (11.7 percent).

Imports from the United States fell 0.7 percent to CAD 32.4 billion. Imports from countries other than the United States were up 2.1 percent, led by Brazil (bauxite) and South Korea (passenger cars).

Year-on-year, exports rose 12.4 percent and imports by 10.4 percent.


Friday August 04 2017
Canada's Trade Deficit Biggest in 9 Months
Anna | anna@tradingeconomics.com

Canada´s trade deficit increased to CAD 3.60 billion in June 2017, following an upwardly revised CAD billion 1.36 billion shortfall in the previous month and worse than market expectations of a CAD 1.35 billion deficit. Exports fell from record high while imports edged up to reach new record.

Exports tumbled 4.3 percent month over month to $46.51 billion, the largest decrease since February 2016. Exports fell in nine out of 11 categories, led by a decrease in metal and other mineral products, as well as energy.

Prices were down 2.7%, with widespread declines throughout the commodity sections. Export volumes (-1.7%) were also down. Metal and non-metallic mineral products and energy products were the largest contributors to the decrease in export values in June. Exports excluding energy products declined 3.4%. Year over year, total exports were up 12.4%.

Exports of metal and non-metallic mineral products decreased 14.9% to $5.3 billion in June, following a 12.4% increase in May. Unwrought precious metals and precious metal alloys—mainly unwrought gold to the United Kingdom—were down $809 million in June. This follows a record high in May due to an increase in gold transfers within the banking sector. For the section as a whole, volumes decreased 10.0% and prices were down 5.5%.

Also contributing to the overall decrease in June were lower exports of energy products, down 9.2% to $7.3 billion. Exports of crude oil and crude bitumen fell 7.4% to $4.6 billion, the fourth consecutive monthly decline. This was an atypical decrease for crude oil in June, a month that usually sees increases. Exports of other energy products, mostly coal, also fell in June, down 26.5% to $497 million. This follows three consecutive monthly increases of coal exports. Overall, prices in the section were down 6.1% and volumes decreased 3.3%.

Imports edged up 0.3% month over month to $50.1 billion in June, setting a new record high. Metal ores and non-metallic minerals and aircraft and other transportation equipment and parts contributed the most to the increase.

Imports of metal ores and non-metallic minerals rose 39.1% to a record high $1.3 billion in June, mostly on higher volumes. Other metal ores and concentrates (+48.8%) were responsible for the increase, mainly on stronger imports of gold bullion from Japan and Egypt for refining purposes.

Imports of aircraft and other transportation equipment and parts rose 11.7% to a record high $2.3 billion in June. Higher imports of aircraft (+30.4%) and ships, locomotives, railway rolling stock, and rapid transit equipment (+71.2%) led the gain. The import of new airliners and railcars for the transportation of petroleum from the United States contributed the most to the growth.

Largely offsetting these gains were lower imports of motor vehicles and parts, down 3.2% to $9.4 billion, with widespread decreases throughout the section. The overall decrease follows five consecutive monthly increases.

Exports to the United States were down 4.5% to $34.5 billion in June, mostly on lower exports of crude oil. Imports from the United States fell 0.7% to $32.4 billion, also on lower imports of crude oil. As a result, Canada's trade surplus with the United States narrowed from $3.5 billion in May to $2.2 billion in June, the smallest surplus since June 2016. The Canadian dollar gained 1.7 cents US relative to the American dollar in June.

Exports to countries other than the United States were down 4.0%, mainly on lower exports of unwrought gold to the United Kingdom as well as lower exports of coal to Japan. Imports from countries other than the United States were up 2.1%, led by Brazil (bauxite) and South Korea (passenger cars). Consequently, Canada's trade deficit with countries other than the United States widened from $4.9 billion in May to $5.8 billion in June.



Friday August 04 2017
Canada Jobless Rate Lowest Since 2008
Statistics Canada |Luisa Carvalho | luisa.carvalho@tradingeconomics.com

The unemployment rate in Canada decreased to 6.3 percent in July of 2017 from 6.5 percent in the previous month and better than market expectations of 6.5 percent. It is the lowest jobless rate since October of 2008. The number of unemployed persons fell by 23.5 thousand while employed rose 10.9 thousand, beating market consensus of a 10 thousand increase

Unemployment decreased by 23,500 to 1,246,800, and employment went up by 10.9 thousand to 18,421,900. Full-time employment increased by 35.1 thousand while part-time employment decreased by 24.3 thousand.

There were more people working wholesale and retail trade (+21,700); information culture and recreation (+18,300); manufacturing (+14,000); transportation (8,400) and natural resources (8,000). In contrast, there were 10,000 fewer people working in agriculture and public administration (-10,300).

The number of employees was little changed in both the private and public sectors. 

Employment rose in Ontario and Manitoba, while it declined in Alberta, Newfoundland and Labrador as well as in Prince Edward Island.

The participation rate decreased slightly to 65.7 percent from 65.9 percent in the previous month.


Friday July 21 2017
Canada Inflation Rate At 2015 Low
Statistics Canada | Joana Taborda | joana.taborda@tradingeconomics.com

Consumer prices in Canada increased 1 percent year-on-year in June of 2017, following a 1.3 percent rise in May and in line with market expectations. It is the lowest inflation rate since October of 2015, mainly due to a 1.4 percent fall in gasoline prices.

Year-on-year, transportation cost rose 0.6 percent, following a 2.2 percent gain in May. This deceleration was led by gasoline prices, which fell 1.4 percent, after increasing 6.8 percent in May. The purchase of passenger vehicles index declined for the first time since February 2015, down 0.2 percent. Meanwhile, passenger vehicle insurance premiums rose 2.1 percent, following a 1.4 percent increase in May.

The shelter index increased 1.6 percent, after rising 1.9 percent in May. Homeowners' replacement costs, which rose 4.1 percent, contributed the most to this price increase. At the same time, prices for natural gas (+10 percent) and fuel oil (+7.8 percent) increased at a slower rate than they did in May, contributing the most to the deceleration in the shelter index. Growth in the rent index (+0.7 percent) rose to a rate not recorded since May 2016, while there was no change in mortgage interest cost for the third month in a row, following 31 months of declines.

Household operations, furnishings and equipment costs rose 0.2 percent, matching the increase in May. The telephone services index was up 2 percent, following a 1.1 percent rise in May. At the same time, prices for household appliances declined 3.3 percent, after falling 2.1 percent in May.

The food index rose 0.6 percent, after posting declines for eight consecutive months. Prices for food purchased from stores decreased 0.3 percent, after dropping 1.2 percent in May. Declines in the meat and bakery products indexes moderated, while the fresh vegetables index increased at a faster pace in June than in May. Prices for cereal products fell 3.7% percent, following a 2.7 percent decline in May. Prices for food purchased from restaurants registered a 2.5 percent gain.

On a monthly basis, consumer prices edged down 0.1 percent, following a 0.1 percent gain in May.

The core index rose went up 0.1 percent on the month and rose 0.9 percent on the year, the same as in May. It is the lowest annual core inflation since February of 2011.