Canadian Monthly GDP Growth (July 2018) – September, 2018

The Canadian economy expanded at a 0.2 per cent monthly rate in July after recording no change in June. Growth was fairly broad based with 12 of 20 industrial sectors reporting higher output, led by gains in manufacturing, wholesale trade and the recovery of real estate transactions after the introduction of the B20 mortgage stress test. With the first month of third quarter GDP data now available, we are tracking overall third quarter growth at 1.8 per cent .

While economic growth in Canada is on pace to slow down slightly compared to the second quarter, output is still expanding at slightly beyond its sustainable, long-run rate. That means continued upward pressure on inflation and further interest rate increases from the Bank of Canada.

For more information, please contact:  Gino Pezzani.

Canadian Retail Sales and Inflation – September, 2018

Canadian retail sales increased 0.3 per cent on a monthly basis in July, and were 3.7 per cent higher on a year-over-year basis. Retail strength was broad based with sales up in 8 of 11 sub-sectors representing 55 per cent of total retail trade. In BC, consumer spending continues to weaken as retail sales declined 0.5 per cent on a monthly basis and were just 1.2 per cent higher year-over-year.

Canadian inflation, as measured by the Consumer Price Index (CPI), registered 2.8 per cent in the 12 months to August following a 3 per cent increase in prices in July. The Bank of Canada’s three measures of trend inflation all increased in August and average 2.1 per cent.   In BC, provincial consumer price inflation was 2.9 per cent in the 12 months to August.  With inflation trending higher in recent months, the Bank of Canada is almost certain to raise its overnight rate at its next meeting in October.

For more information, please contact:  Gino Pezzani.

Canadian Employment – September, 2018

Total Canadian employment declined by 52,000 jobs in August, reversing similar sized gains from July. Part-time job losses, concentrated in Ontario, were the culprit behind the out-sized decline, falling by 92,000 jobs while full-time jobs rose by 40,000. The national unemployment rate increased 0.2 points to 6 per cent and total hours worked across the economy rose 1.6 per cent. Total employment was up 0.9 per cent over this time last year.

In BC, employment rose for a second consecutive month as the economy added close to 10,000 jobs in August. On a year-over-year basis, employment was flat and the provincial unemployment rate rose 0.3 points to 5.3 per cent as more people were actively searching for work.

For more information, please contact: Gino Pezzani.

Canadian Manufacturing Sales – September, 2018

Canadian manufacturing sales increased for a third consecutive month, rising 0.9 per cent on a monthly basis in July. Sales were higher in 11 of 21 manufacturing sub-sectors, representing 68 per cent of manufacturing sales.

In BC, where the manufacturing sector employs about 170,000 people, manufacturing sales fell 1.7 per cent on a monthly basis but were 10 per cent higher year-over-year. Manufacturing in BC has maintained robust growth this year, particularly in the forestry sector. That growth is providing a boost to markets around the province in which the forestry sector is a major employer.

For more information, please contact: Gino Pezzani.

The September Issue of Mortgage Rate Forecast

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