Worsening Unemployment Calls for Better Employment Insurance

Here is my take on today’s Labour Force Survey: National Unemployment Much attention will undoubtedly focus on the unemployment rate hitting 8% in March, which Statistics Canada notes is “the highest rate in seven years.” While technically correct, this presentation understates the situation’s severity. The unemployment rate briefly reached 8% seven years ago, in December 2001 and January 2002. However, […]

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A Hopeful Sign, But Not Cause for Complacency

The increase in consumer prices between January and February suggests that the threat of deflation may be less imminent than it appeared during the previous five months of falling prices. Whereas three provinces actually posted negative inflation rates in January, all posted positive inflation rates in February. Today’s Bloomberg report begins by noting that this data “may ease pressure on […]

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Unemployment Hits Twelve-Year High

Preliminary reports on this morning’s Labour Force Survey emphasize that the unemployment rate reached its highest level since 2003. However, the situation is far worse in absolute terms. The number of officially unemployed Canadians rose by 106,000 in February, pushing the total over 1.4 million. In other words, the ranks of Canada’s unemployed swelled to their highest level since February […]

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Economic Blackout: Today’s GDP Figures

Numbers Worse than Official Expectations Real GDP dropped by 1% in December 2008, as large a monthly decline as in the August 2003 blackout. The difference is that, whereas August 2003 was an aberration, December 2008 continues a worsening trend. During 2008 as a whole, the economy eked out 0.5% growth, which falls short of the 0.7% forecast by both […]

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Current Account: 2008 vs. 1999

Initial reports of this morning’s current account deficit emphasize that the fourth quarter of 2008 was the first such deficit since the second quarter of 1999. While correct, this historical comparison overlooks a crucial difference. Canada’s balance of investment income has always been negative. In the second quarter of 1999 and most previous quarters, Canada’s trade surplus was not large enough […]

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Public Investment to the Rescue

The main message in Statistics Canada’s release of 2009 investment intentions is that modestly higher public investment will partly offset sharply lower private investment. The glass-half-full perspective is that things would look far worse without the increase in public investment. The glass-half-empty perspective is that this increase will not be nearly enough to fully offset the loss of private investment. […]

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Deflation Watch 2009

Consumer prices fell by 0.1% between December 2008 and January 2009, reducing the annual inflation rate to 1.1%. Prince Edward Island joined the other two maritime provinces in having the dubious distinction of a negative inflation rate. This decline mainly reflected falling gasoline prices. Lower fuel costs were partly offset by higher mortgage-interest costs due to higher real-estate prices than […]

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The Trade Deficit and Buy Canadian Policy

A standard objection to the Buy Canadian policy proposed yesterday by Canada’s largest industrial unions was that Canada enjoys a trade surplus. Such a policy would allegedly prompt foreign retaliation, erasing our current trade surplus and its contribution to aggregate demand in Canada. This morning, Statistics Canada reported that we actually ran a merchandise trade deficit in December, the first […]

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American Steel

Alarmist media reports on “Buy America” rules for steel used in US public infrastructure projects have emphasized the value of Canadian steel exports allegedly threatened, but have largely ignored the similar value of American steel imported by Canada. In fact, in the most recent month for which data is available (November 2008), Canada bought more steel from the US than […]

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November Plummet

Figures released by Statistics Canada this morning reveal that Canada’s real GDP dropped by 0.7% in November 2008, its largest monthly decline since a 1.0% drop because of the August 2003 power outage. With the exception of that unique event, November’s decline was the largest since at least February 1997, the oldest month for which precisely comparable figures are available. […]

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Dash to Deflation

Today’s Consumer Price Index suggests that Canada is lunging toward deflation. The annual inflation rate plummeted to just 1.2% in December, 2.2% lower than only three months ago. If this pace continues, the national inflation rate will turn negative in the next few months. Two provinces, Nova Scotia and New Brunswick, already recorded negative inflation rates in December. Of course, […]

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The Other Shoe Drops

Generally in recent months and particularly in November, there were pronounced job losses in the province of Ontario and the manufacturing sector. In December, the Ontario and manufacturing numbers did not change much. But job losses spread to other provinces and the construction sector. In effect, the only remaining bright spots in Canada’s labour market have been extinguished. Even adjusting […]

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Deflation Marches On

In November, prices fell for a second consecutive month and annual inflation fell for a third consecutive month. The Consumer Price Index declined from 3.5% in August to 3.4% in September, 2.6% in October, and 2.0% in November. A few more months of decline could turn this annual rate negative. While steadily falling prices would be a boon to individual […]

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The Spectre of Deflation

Seasonally-adjusted consumer prices fell by 0.5% between September and October. While less dramatic than the 1.0% drop in the US, the sudden drop in Canadian prices also raises the possibility of deflation. The annual inflation rate declined from 3.4% in September to 2.6% in October, well below the US rate of 3.7% in October. This pace could put Canada on […]

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Calm Before the Storm?

Today’s apparently rosy Labour Force Survey should not distract policy-makers from serious problems in Canada’s labour market. So far in 2008, full-time employment is down and unemployment is up. Wanted: Full-Time Jobs Total employment rose by 107,000 in September, far exceeding the modest uptick that one might have expected from temporary hiring by Elections Canada. However, as Statistics Canada notes, […]

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Dion’s Voodoo Economics

The Liberals claim, “Corporate tax cuts implemented by the previous Liberal government actually raised government revenues and helped balance our country’s budget after years of Conservative economic mismanagement.” The federal budget was balanced in 1997, but the Liberals did not cut corporate taxes until 2001. Chronology does not support the notion that corporate tax cuts helped to balance the budget. The […]

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The Wage-Price Squeeze

In August 2008, ordinary Canadians were squeezed by rising annual inflation and slowing annual wage growth. The decline in consumer prices from July to August 2008 (-0.2%) was smaller than the normal seasonal decline in prices between these months. (On a seasonally-adjusted basis, Statistics Canada estimates that consumer prices rose 0.2%.) Compared to last month, the annual inflation rate edged up […]

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Low-Wage Recovery?

The August employment numbers seem modestly positive, but only in comparison to July’s ruinous numbers. Canada’s labour market weakened severely during the summer of 2008. The Employment Numbers in Context The creation of 41,000 private-sector jobs in August replaces fewer than half of the 95,000 private-sector jobs lost in July. The loss of 24,000 public-sector jobs in August wipes out […]

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Lack of Investment Slows Economy

My take on today’s second-quarter Gross Domestic Product (GDP) release follows: Economy Shrinks, But Dodges Recession Canada’s GDP was lower at the end of June ($1,327,118 million) than at the end of last year ($1,328,606 million). Although the Canadian economy is smaller now than it was two quarters ago, it is technically not in recession because it did not shrink […]

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Balancing on a Barrel: Canada’s Second-Quarter Current Account

In the second quarter of 2008, record oil prices outweighed the continuing manufacturing crisis, the worst services deficit ever recorded, and widening deficits in investment income and current transfers. The Surplus in Perspective The rise of Canada’s current-account surplus to $6.8 billion in the second quarter is positive news for the Canadian economy.  However, this surplus is still less than last year’s […]

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More Statscan Censorship?

Once again, there seems to be a heavier hand in censoring or editing Statistics Canada’s releases.  This morning The Daily reported that: “Spending on research and development in the higher education sector amounted to $9.6 billion (current dollars) in the fiscal year 2006/2007.” but there was no word on whether this was an increase or decrease from the previous period, which Statscan releases […]

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More Rose-Colouring from Statistics Canada

Am I the only one who detected a distinct note of spin-doctoring in the write-up of Statistics Canada’s eye-popping labour force release yesterday? Here are the first two paragraphs of the release: “Following gains at the beginning of 2008, and little change from April to June, employment dropped by 55,000 in July. The unemployment rate edged down 0.1 percentage points to 6.1%, as many people, particularly […]

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Canada’s Private Sector Stumbles

My take on today’s grisly Labour Force Survey follows: Private-Sector Meltdown Canada’s private sector eliminated 95,000 jobs in July. In other words, nearly 1% of Canadian private-sector jobs disappeared in a single month. The creation of 30,000 public-sector jobs and 11,000 self-employed positions offset less than half of this loss. Although manufacturing accounts for below a fifth of private-sector employment, […]

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Inflation, Wages and Interest Rates

This morning, Statistics Canada released the Consumer Price Index (CPI) for June. Inflation driven by commodity prices justifies higher wages, but should not prompt the Bank of Canada to hike interest rates. Inflation and Wages Rising consumer prices nullified most of the wage gains that Canadian workers made during the last year. From June 2007 through June 2008, consumer prices […]

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Where Do Non-Fuel Emissions Come From?

Duncan Cameron’s comment about the role of agriculture in climate change prompted me to take a closer look at greenhouse-gas emissions from sources other than burning fossil fuels. The final column of the following table is a sectoral breakdown of row 8 from yesterday’s table. All of these emissions are exempt from the Liberal Green Shift.  Sector  Fuel Emissions  Other […]

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Where Do Greenhouse Gases Come From?

A couple of weeks ago, Jeffrey Simpson inaccurately accused the NDP of “ignoring the fact that most emissions come from individuals.” Andrew Coyne is similarly fond of suggesting that, while half of greenhouse-gas emissions are generated by large final emitters, the other half are generated by “consumers”. Both commentators have, to varying degrees, commended the Liberals for introducing a plan that is […]

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Summertime Blues for Canadian Workers

My assessment of today’s Labour Force Survey follows: Devastating Loss of Full-Time Jobs Canada lost 39,000 full-time jobs in June. While 34,000 of these positions were replaced with part-time jobs, 2,000 more Canadians entered the workforce, swelling the ranks of the unemployed by 7,000. One hopes that the Bank of Canada will respond to this labour-market downturn by cutting interest […]

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Dion’s Carbon Revenues

The Liberal Green Shift aims to bring federal taxes on all fossil fuels up to $40 per ton of carbon emissions, in line with the existing federal tax on gasoline. The Handbook provides a detailed costing of the $15.4 billion in accompanying tax cuts, tax credits and contingency funds, but no breakdown of the $15.3 billion in new carbon-tax revenues (page […]

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Profits vs. Wages in Saskatchewan and Newfoundland

Jim’s recent mini-study emphasized that profits now occupy gargantuan shares of GDP in the oil-rich provinces. He and The Jurist have noted the total disconnect between corporate profits and personal income in two of those provinces: Saskatchewan and Newfoundland. To explore this issue further, I have pulled some figures out of the recently-released 2007 Provincial and Territorial Economic Accounts (in […]

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All Job Growth in Lowest-Paid Industry

My take on today’s Labour Force Survey follows: Rising Unemployment For a third consecutive month, more Canadians entered the labour market than found jobs, pushing the number of unemployed workers above 1.1 million for the first time since November 2006. In April, all of the modest increase in employment was self-employment. One must ask whether Canadians are becoming self-employed voluntarily […]

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