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Canadian Economics: What You Missed This Week

Economic Indicators Dec 04, 2022 16:04
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By Ketki Saxena 

Investing.com -- Last week was a busy one in Canadian economics, with several key pieces of data out last week included shrinking employment growth, weakening manufacturing activity, and a GDP reading that while robust indicated underlying  trends that suggested a weakening in the Canadian economy. 

Here’s a recap of what you missed last week in Canadian Economics

Real GDP (Q3): Canadian GDP rose 2.9% (annualized) in Q3, a significantly stronger increase than expected by economists, and nearly double the forecast by the Bank of Canada in its October Monetary Policy Report. However, analysts noted signs of softening including a decline in consumer spending, and continued retrenchment in housing markets. Spending by households fell by 1% compared to Q2, while  residential investment fell by 15.4%, building on a 31.5% decline in Q2.

Current Account Balance (Q3): Canada swung to a current-account deficit in the third quarter, recording a deficit of $11.1 billion following surpluses the previous two quarters. In short, this means Canada owes more money to other countries than other countries do to Canada. The fall was linked to record lower prices of energy products due to a fall in prices, and a widening investment income deficit.

Labour Productivity (Q3): Labour productivity - akin to something like a GDP for businesses - increased 0.6% in the third quarter, after edging up 0.1% in Q2. This was the second consecutive quarterly increase, following seven quarters of declines. The gain in productivity in the third quarter reflects the continued growth in business output. Working hours were unchanged.

Manufacturing PMI (November):  Canadian manufacturing activity weakened for a fourth straight month in November, further stoking worries that the economy would slip into recession.However, the pace of contraction and a measure of inflation pressures eased. The S&P Global (NYSE:SPGI) Canada Manufacturing Purchasing Managers' Index (PMI) rose to a seasonally adjusted 49.6 in November from 48.8 in October. A reading of less than 50 shows a contraction.

Employment Report (November): Employment was little changed in November as the economy added a modest 10,000 jobs, Statistics Canada says. Unemployment was 5.1%, down from 5.2% in October. Wages were up 5.6% compared to a year ago. The data represents a cooling in the labour market, although unemployment remains historically low. Wages continue to lag inflation, but indicate a substantial rise in the previous months, further adding pressure on the Bank of Canada to prevent a wage price spiral.

 

Canadian Economics: What You Missed This Week
 

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