Friday October 11 2019
Canada Jobless Rate Falls to 3-Month Low of 5.5%
Statistics Canada | Agna Gabriel | agna.gabriel@tradingeconomics.com

The unemployment rate in Canada fell to 5.5 percent in September of 2019 from 5.7 percent in the previous month and below market expectations of 5.7 percent. It was the lowest jobless rate since June, as the economy added 53.7 thousand jobs, driven by gains in full-time work (+70 thousand) while part-time works fell (-16.3 thousand).

In September, employment increased in Ontario (+41,000) and Nova Scotia (+ 3,200), while it was little changed in all other provinces.

In the public sector, the number of employees increased by 33,000 in September and the number of self-employed workers rose by 42,000. Meantime, the number of private sector employees was virtually unchanged. 

There were more people working in health care and social assistance (+30,000), as well as in accommodation and food services (+23,000). At the same time, there were declines in information, culture and recreation (-37,000), and in natural resources (-7,000).

For men in the core working ages of 25 to 54, employment rose by 36,000 and among core-aged women, employment rose by 33,000, the largest gain for this group since January 2017. Employment was virtually unchanged for people aged 55 and older. 

For youth aged 15 to 24, employment held steady, and the unemployment rate was little changed at 11.9%.

The labour force participation rate decreased to 65.7 percent in September from 65.8 percent in August and compared with market expectations of 65.8 percent.




Friday October 04 2019
Canada Trade Gap Narrows in August
Statistics Canada | Rafael Gonzalez | rafael.gonzalez@tradingeconomics.com

Canada’s trade gap decreased to CAD 0.96 billion in August 2019 from an upwardly revised CAD 1.38 billion in the previous month and against market expectations of a CAD 1.0 billion gap. Exports were up 1.8 percent, while imports rose at a softer 1.0 percent.

Exports from Canada rose 1.8 percent month-over-month to CAD 50.58 billion in August 2019 from a downwardly revised CAD 49.66 billion in July. Shipments increased for energy products (3.9 percent), driven by higher exports of crude oil (2.9 percent); aircraft (38.7 percent) and metal and non-metal products (3.6 percent). Meanwhile, lower exports of motor vehicles and parts (-2.3 percent) partially offset the increase in total exports.

Exports to the US rose 3.1 percent in August while those to countries other than the US were down 0.5 percent.

Imports to Canada rose 1.0 percent month-over-month to CAD 51.54 billion in August 2019 from an upwardly revised CAD 51.05 billion in the previous month. Higher imports of metal and non-metallic mineral products (9.4 percent) were the main contributor to the overall gain, mainly on imports of gold, which reached their highest level in more than two years. Also, imports advanced for energy products (9.7 percent) and metal ores and non-metallic minerals (8.8 percent). Meanwhile, these increases were partially offset by a 2.5 percent decrease in imports of consumer goods.

Imports from the US increased 1.8 percent while those from countries other than the US dropped 0.5 percent. 

Canada's trade surplus with the United States widened from CAD 4.4 billion in July to CAD 4.9 billion in August.





Wednesday September 18 2019
Canada Inflation Rate at 5-Month Low of 1.9%
Statistics Canada | Luisa Carvalho | luisa.carvalho@tradingeconomics.com

The annual inflation rate in Canada edged down to 1.9 percent in August 2019 from 2.0 percent in the previous month and below market expectations of 2 percent. It was the lowest inflation rate since March, primarily due to lower gasoline prices.

Year-on-year, prices slowed mostly for transport (1.4 percent vs 1.5 percent in July), namely gasoline (-10.2 percent vs -6.9 percent) amid lower global oil prices; and food (3.6 percent vs 3.8 percent), driven by fresh vegetables, fresh fruit and meat. Also, cost increased less for recreation, education and reading (2.0 percent vs 2.7 percent); health and personal care (0.9 percent vs 1.5 percent) and alcoholic beverages, tobacco and recreational cannabis (0.9 percent vs 1.2 percent). In contrast, inflation edged higher for shelter (2.4 percent vs 2.3 percent); household operations, furnishings and equipment (0.5 percent vs 0.3 percent). Meantime, prices advanced at the same pace for clothing & footwear (1.1 percent).

Regarding special aggregates of the CPI, cost of goods slowed to 0.9 percent in August from 1.3 percent in July, namely durable (1.6 percent vs 1.9 percent) and non-durable goods (0.6 percent vs 1.3 percent); and cost of energy fell more deeply (-4.7 percent vs -3.2 percent). Conversely, cost of services increased at a faster pace (2.6 percent vs 2.4 percent).

On a monthly basis, consumer prices dropped 0.1 percent, after rising 0.5 percent in the previous month and compared with market expectations of a 0.2 percent decrease.

The BoC's annual core inflation, which excludes volatile items, eased to 1.9 percent in August from 2 percent in July, and below market consensus of 2.2 percent. It was the lowest rate in four months.





Friday September 06 2019
Canada Jobless Rate Remains at 4-Month High of 5.7%
Statistics Canada | Agna Gabriel | agna.gabriel@tradingeconomics.com

The unemployment rate in Canada remained unchanged at 5.7 percent in August of 2019, matching the high of April and in line with market expectations. Employment rose by 81,100, well above an expected 15,000 gain, driven by both full-time employment (+23,800) and part-time employment (+57,200).

In August, employment increased in Ontario (+58,000), Quebec (+20,000), Manitoba (+5,200), Saskatchewan (+2,800) and New Brunswick (+2,300), while it was little changed in the remaining provinces.

Following a decline in July, the number of private-sector employees increased by 94,000 in August, while the number of public-sector employees and self-employed workers held steady.

There were more people employed in finance, insurance, real estate, rental and leasing (+22,000); educational services (+21,000); and in professional, scientific and technical services (+17,000). In contrast, employment declined in business, building and other support services (-22,000).

Employment among youth aged 15 to 24 increased by 42,000, and among those aged 55 and over it went up 22,000 while employment among men and women in the core working ages of 25 to 54 was little changed. 

The labour force participation rate increased to 65.8 percent in August from 65.6 percent in July and compared with market expectations of 65.7 percent.


Wednesday September 04 2019
Canada Leaves Monetary Policy Unchanged
BoC | Stefanie Moya | stefanie.moya@tradingeconomics.com

The Bank of Canada kept its benchmark interest rate steady at 1.75 percent on September 4th 2019, as widely expected. It remained the highest rate since December 2008. Policymakers said that the degree of monetary policy accommodation is appropriate and will pay attention to global developments and their impact on the outlook for Canadian growth and inflation. The Bank Rate and deposit rate were also left unchanged at 2.0 percent and 1.50 percent, respectively.

Statement by the Bank of Canada:

As the US-China trade conflict has escalated, world trade has contracted and business investment has weakened. This is weighing more heavily on global economic momentum than the Bank had projected in its July Monetary Policy Report (MPR). Meanwhile, growth in the United States has moderated but remains solid, supported by consumer and government spending. Commodity prices have drifted down as concerns about global growth prospects have increased. These concerns, combined with policy responses by some central banks, have pushed bond yields to historic lows and inverted yield curves in a number of economies, including Canada.

In Canada, growth in the second quarter was strong and exceeded the Bank’s July expectation, although some of this strength is expected to be temporary. The rebound was driven by stronger energy production and robust export growth, both recovering from very weak performance in the first quarter. Housing activity has regained strength more quickly than expected as resales and housing starts catch up to underlying demand, supported by lower mortgage rates. This could add to already-high household debt levels, although mortgage underwriting rules should help to contain the buildup of vulnerabilities. Wages have picked up further, boosting labour income, yet consumption spending was unexpectedly soft in the quarter.  Business investment contracted sharply after a strong first quarter, amid heightened trade uncertainty. Given this composition of growth, the Bank expects economic activity to slow in the second half of the year.

Inflation is at the 2 percent target. CPI inflation in July was stronger than expected, largely because of temporary factors. These include higher prices for air travel, mobile phones, and some food items, which are offsetting the effects of lower gasoline prices. Measures of core inflation all remain around 2 percent.

In sum, Canada’s economy is operating close to potential and inflation is on target. However, escalating trade conflicts and related uncertainty are taking a toll on the global and Canadian economies. In this context, the current degree of monetary policy stimulus remains appropriate. As the Bank works to update its projection in light of incoming data, Governing Council will pay particular attention to global developments and their impact on the outlook for Canadian growth and inflation.




Wednesday September 04 2019
Canada Trade Gap Widens in July
Statistics Canada | Stefanie Moya | stefanie.moya@tradingeconomics.com

Canada’s trade deficit widened to CAD 1.12 billion in July 2019 from a downwardly revised CAD 0.06 billion in the previous month and compared with market expectations of a CAD 0.4 billion shortfall. Imports rose 1.2 percent while exports dropped 0.9 percent.

Imports increased 1.2 percent over the previous month to CAD 50.9 billion in July, boosted by higher purchases of consumer goods (2.4 percent) in particular pharmaceutical products (+19.7 percent), which hit a record high, as a result of gains in imports from Switzerland and Germany. Additionally, imports of aircraft and other transportation equipment and parts advanced 10.2 percent, namely locomotive cars used to transport crude oil, and parts for armoured vehicles. Also, purchases of metal ores and non-metallic minerals went up 12.6 percent, largely on the strength of other metal ores and concentrates, bauxite and aluminum oxide, and gold driven mainly by increased shipments from Japan and Peru.

Imports from the US rose 1.6 percent and those from countries other than the US advanced 0.5 percent, of which Switzerland (pharmaceutical products) and Belgium (parts for armoured vehicles and pharmaceutical products).

Exports declined 0.9 percent to CAD 49.8 billion, mainly due to lower sales of energy product (-6.7 percent), in particular crude oil (-7.7 percent). In addition, sales of farm, fishing and intermediate food products fell 5.4 percent, mainly as a result of lower wheat exports (-20.9 percent). On the other hand, sales of metal and non-metallic mineral products went up 8.5 percent, with gold exports contributing the most to the gain, on higher sales of refined gold to the US and transfers of gold within the banking sector. Also, exports of unwrought aluminum increased 18.2 percent in July, the first full month after the removal of US tariffs on Canadian aluminum.

Exports to the US fell 1.1 percent and those to countries other than the US edged down 0.3 percent, mostly to China (metal ores and pork).

The country's trade surplus with the US narrowed to CAD 4.6 billion from CAD 5.5 billion in the previous month.



Friday August 30 2019
Canada Q2 GDP Growth Strongest in 2 Years
Statistics Canada | Stefanie Moya | stefanie.moya@tradingeconomics.com

The Canadian economy advanced 0.9 percent on quarter in the three months to June 2019, easing from a 0.1 percent expansion in the previous period. It was the strongest growth rate since the second quarter of 2017, as exports rose while domestic demand declined. Expressed at an annualized rate, real GDP expanded 3.7 percent in the second quarter, faster than a 0.5 percent growth in the first three months of the year and beating market forecasts of 3 percent.

Exports increased 3.2 percent, boosted by sales of goods which rose 3.7 percent, following declines in the previous two quarters, namely energy products (5.9 percent), farm and fishing products (15.2 percent), non-metallic minerals (19 percent, the sharpest upturn since the third quarter of 2016), aircraft and related engines and parts (10 percent). Also, exports of services went up 1.1 percent, the same pace as in Q1, as exports of travel services (2.4 percent)

Import declined 1 percent, after a 2.1 percent gain  in the first three months of the year, mainly due to purchases of aircraft and associated engines and parts (-32.1 percent), pharmaceuticals and medicinal products (-3.9 percent) and communication and audio and video equipment (-6.7 percent). Meanwhile, imports of energy products rebounded 7.8 percent, following a 4.2 percent fall in prior period and purchases of motor vehicles and parts slowed to 1.4 percent. Additionally, imports of services dropped 1.8 percent, largely owing to a 4.0 percent decline in transportation services.

Household spending growth slowed to 0.1 percent from 0.7 percent in the first quarter. Outlays on durable goods fell 0.3 percent, largely as a result of a 1.4 percent decline in purchases of vehicles. Outlays on semi-durable goods eased to 0.3 percent; those on non-durable goods edged down 0.1 percent, after a 0.8 percent rise and those on services advanced 0.3 percent, easing from a 0.5 percent gain.

Following five consecutive quarterly contractions, housing investment went up 1.4 percent, as increases in multi-dwelling investments and conversions led the growth in new home construction (+0.9 percent). Higher resale activities boosted growth in ownership transfer costs (+3.8 percent), while renovation activities increased 0.7 percent.

Business investment fell 1.6 percent, mainly due to non-residential structures and machinery and equipment (-4.3 percent), of which machinery and equipment investment (-9.3 percent), in particular aircraft and other transportation equipment (-61.1 percent). On the other hand, investment in computers and related equipment rose 7.7 percent, rebounding from a 1.7 percent decrease. Growth in business investment in non-residential buildings slowed to 1.1 percent, while investment in engineering structures went down 1.0 percent, the sixth consecutive quarterly decline. Business investment in intellectual property products advanced 0.6 percent, recovering from a 1.3 percent fall.




Thursday August 29 2019
Canada Current Account Deficit Smallest Since 2008
Statistics Canada | Rafael Gonzalez | rafael.gonzalez@tradingeconomics.com

Canada's current account gap narrowed by CAD 10.2 billion to CAD 6.4 billion in the second quarter of 2019 from a downwardly revised CAD 16.6 billion in the previous period and compared with market expectations of a CAD 9.8 billion shortfall. It was the smallest current account gap since Canada returned to a deficit position at the end of 2008, reflecting a much lower deficit on goods.

The goods deficit decreased by CAD 8.6 billion to CAD 0.3 billion, following a CAD 8.9 billion gap in the previous quarter. Total exports of goods increased by CAD 7.6 billion to CAD 154.1 billion in the prior quarter. Main contributors were energy products (CAD +3.4billion) on higher prices and volumes of crude petroleum, while motor vehicles and parts as well as farm, fishing and intermediate food products also contributed to the increase. Total imports of goods went down by CAD 1.0 billion, following a CAD 3.5 billion increase in the prior quarter. Imports of aircraft and other transport equipment and parts fell CAD 1.9 billion, almost completely offsetting the gain in the first quarter. Higher imports of motor vehicles and parts and energy products moderated the overall reduction in the quarter.

On the geographical basis, the goods surplus with the United States reached CAD 15.9 billion, the highest in over 10 years. Meantime, the goods deficit with non-US countries narrowed by CAD 2.9 billion, mainly on lower deficits with China, the Netherlands and Belgium.

The services deficit narrowed by CAD 0.7 billion to CAD 5.2 billion in the second quarter of 2019, the lowest level since the end of 2011. Exports of services were up by CAD 0.4 billion in the second quarter, while imports declined by CAD 0.3 billion. 

The deficit on primary income, which covers investment income on international assets and liabilities and compensation of employees, declined by CAD 0.9 billion to CAD 0.4 billion. Canada's investment income balance posted a first-ever surplus on the growth of profits earned by Canadian direct investors on their assets abroad.




Wednesday August 21 2019
Canada July Inflation Rate Steady at 2%
Statistics Canada | Stefanie Moya | stefanie.moya@tradingeconomics.com

The annual inflation rate in Canada was at 2 percent in July 2019, unchanged from the previous month and above market expectations of 1.7 percent, as a slowdown in cost of services was offset by a rise in prices of goods, namely durable goods and food

Year-on-year, prices eased for shelter (2.3 percent from 2.5 percent in June); transportation (1.5 percent from 1.6 percent), namely air transportation (4.6 percent from percent) and travel tours (7.5 percent from percent); household operations, furnishings and equipment (0.3 percent from 1.2 percent); clothing and footwear (1.1 percent from 1.6 percent) and alcoholic beverages, tobacco and recreational cannabis (1.2 percent from 1.4 percent). On the other hand, cost advanced further for food (3.8 percent from at 3.5 percent), recreation, education and reading (2.7 percent from 2.0 percent) and health and personal care (1.5 percent from 1.1 percent).

Regarding special aggregates of the CPI, cost of services slowed to 2.4 percent in July from 2.8 percent in June, as consumers paid less for telephone services (-2.5 percent) due to an industry-wide shift in the pricing structure of cellular data plans amid intensifying competition among wireless providers. The introduction of unlimited data plans coincided with a reduction in the subsidies for wireless devices, shifting more of the cost of devices to consumers. Meanwhile, cost of goods rose 1.3 percent, after increasing 0.9 percent in the prior month, boosted by durable (1.9 percent from 1.4 percent), semi-durable (0.6 percent from 0.4 percent) and non-durable goods (1.3 percent from 0.8 percent). Additionally, cost of energy declined at a softer pace (-3.2 percent from -4.1 percent).

On a monthly basis, consumer prices went up 0.5 percent, rebounding from a 0.2 percent fall in June and compared with market forecasts of a 0.2 percent gain.

The BoC's annual core inflation, which excludes volatile items, was steady at 2 percent, below market consensus of 2.3 percent.


Friday August 09 2019
Canada Jobless Rate Unexpectedly Rises to 5.7% in July
Agna Gabriel | agna.gabriel@tradingeconomics.com

The unemployment rate in Canada rose to 5.7 percent in July of 2019 from 5.5 percent in the previous month and compared with market expectations of 5.5 percent. It was the highest jobless rate since April, as the economy shed 24.2 thousand jobs led by both full-time (-11.6 thousand) and part-time jobs (-12.6 thousand).

While employment was little changed overall in July, it decreased in Alberta (-14,000), Nova Scotia (-6,200) and New Brunswick (-4,800), and increased in Quebec (+17,000) and Prince Edward Island (+1,000). Employment held steady in the other provinces. 

There were fewer people working in wholesale and retail trade (-21,000); transportation and warehousing (-15,000); "other services" (-11,000); and natural resources (-8,700). In contrast, employment increased in construction (+25,0000) and public administration (+9,200).

The number of private-sector employees fell by 69,000 in July and the number of public-sector employees was little changed, while the number of self-employed workers increased by 28,000. 

Employment declined in July both for youth aged 15 to 24 (-19,000) and for women in the core working ages of 25 to 54 (-18,000), while it increased for core-aged men (+22,000).

Youth unemployment rate increased 0.7 percentage points to 11.4% in July of 2019. 

The labour force participation rate decreased to 65.6 percent in July from 65.7 percent in June.