financial post editor-in-chief kevin carmichael taps the data
to piece together the
evolving economic picture
Jobs
Unemployment rate, seasonally adjusted
December 2021: The jobless rate dropped to 5.9 per cent, the lowest since the eve of the pandemic. The underutilization rate, which includes workers who have stopped looking for jobs or are working less than usual, dropped to 12 per cent, also the lowest since the start of the crisis.
Why it matters: Bank of Canada Governor Tiff Macklem has indicated that he’d like to see the jobless rate back at pre-pandemic levels of around 5.5 per cent before he considers raising interest rates, although the spike in inflation could make that difficult. Assume the same for the underutilization rate, which was at 11.4 per cent in February 2020.
Net change in jobs
Trade
Exports, all merchandise
Exports, services
Business activity
Closings
Active businesses
Openings
Household income
Household disposable income, quarterly
Household saving rate, quarterly
Retail
Retail sales,
monthly
Food & beverage stores
Automobile dealers
Building material, gardening
Clothing and clothing accessories
Long-term unemployment, 27 weeks or more
Work
Total hours worked, monthly, rate of change, Feb. 2020 = 0
Credit
Mortgage credit, year over year change
Business credit, year over year change
December 2021: There were about 19.4 million Canadians in paid employment, an increase of about 55,00 from the previous month. Full-time jobs increased by about 123,000 compared with a gain of about 80,000 in November.
Why it matters: Employment plunged by about three million positions in the immediate aftermath of the initial lockdowns, triggering an epic economic collapse. Employment returned to its pre-pandemic level in September and is now roughly where it would have been if the COVID recession hadn't interrupted the trend.
December 2021: Total hours worked increased 0.3 cent from November, the smallest gain since August, but 1.8 per cent more than at the start of the pandemic. Hours had almost recovered, then the third wave of COVID-19 forced many businesses to shut again. The Omicron wave likely will cause another setback, but high vaccination rates should help the economy avoid a big backward step this time.
Why it matters: Hours worked is one of the better guides of economic health, so much so that Finance Minister Chrystia Freeland said that she would be watching it to help determine how much stimulus will be needed in the future.
September 2021: There were 906,758 active businesses, a decline of 617 from August and the second consecutive monthly drop after reaching a two-year high of almost 910,000 in July.
Why it matters: Canada struggled after the Great Recession because there were too few companies left to take full advantage of the global recovery. A goal of policy-makers this time is to keep more companies intact. An encouraging sign is a surge in entrepreneurship. New “entrants” averaged 16,675 between October and August, compared with a monthly average of 15,144 in 2019.
November 2021: Exports of goods increased 3.8 per cent from October, a decline from a gain of almost seven per cent the previous month, but surprisingly strong given that historic floods disrupted traffic at the Port of Vancouver. Services exports increased 2.8 per cent to a seasonally adjusted $11.7 billion, matching their value in February 2020 for the first time since the start of the pandemic. Why it matters: Overall, the export recovery is a positive, mostly because of stronger prices for many of the commodities that Canada produces. If supply-chain disruptions weren't weighing automobile production, and travel restrictions weren’t impeding tourism, the recovery would be that much stronger.
November 2021: Retail sales increased 0.7 per cent from October, led by higher receipts at gasoline stations and hardware stores. Total sales were the second highest on record.
Why it matters: Domestic consumption is the primary engine of Canada’s economy, and retail sales are the best way to monitor that contribution. Spending patterns changed, but overall demand has held up remarkably well during the crisis. Savings rates are at extremely high levels. Households have a lot of purchasing power if they choose to deploy it.
Q3 2021: Household disposable income increased 1.7 per cent from the second quarter, compared with a gain of 1.5 per cent the previous quarter. The $1.47 billion that Canadians had at the ready was five per cent more than a year earlier, reflecting the combination of generous emergency benefits and a strong rebound in employment in 2021. Why it matters: The federal government compensated for effectively closing entire industries with generous emergency benefits. Those payments now represent a source of stimulus as the economy reopens. The savings rate was 11 per cent, down from 14 per cent in the second quarter, but still elevated. The savings rate was only 2.7 per cent at the end of 2019.
December 2021: There were about 293,000 people who had been unemployed for at least 27 weeks, the fewest since August 2020. To be sure, only about 99,000 people had been out of work that long in February 2020. About 24 per cent of total unemployed had been without work for six months or more, compared with 15.6 per cent at the start of the pandemic.
Why it matters: The longer people spend on the sidelines of the labour market, the harder it becomes for them to find jobs that maximize their potential because their skills atrophy. The strength of Canada’s post-pandemic economy will be determined by how quickly this number shrinks.
October 2021: Residential mortgage credit increased 10.2 per cent from October 2020, the slowest since June, but still elevated by historical standards. Meanwhile, non-mortgage loans to non-financial corporations rose 7.8 per cent from a year earlier, the fifth consecutive monthly increase, but a slower pace than before the pandemic.
Why it matters: The housing market is one of the catalysts of the recovery, but many fear mania is now setting in, as house prices in some markets have detached from fundamentals. Meanwhile, few will believe the economy is truly solid until business lending returns to pre-pandemic levels.
May 2021: Residential mortgage credit increased 8.3 per cent from a year earlier, the fastest since June 2010. Meanwhile, non-mortgage loans, a proxy for business credit, dropped 0.7 per cent from a year earlier, the third consecutive monthly decline, but slower than either of the previous two months.
Why it matters: The housing market is one of the catalysts of the recovery, but many fear mania is now setting in, as house prices in some markets have detached from fundamentals. Meanwhile, few will believe the economy is truly solid until business lending returns to pre-pandemic levels.
Sporting goods, hobby, books, music stores
Underutilization rate
Full time net change
New entrants
Total
Per cent of unemployed
