Canada March 2024

3/11/2024

Unemployment Rises to 5.8%

The unemployment rate rose to 5.8% in February after dropping to 5.7% in January.
Unemployment reached a record low of 4.9% in June and July 2022. In January 2021 unemployment peaked at 9.4%.
The economy added 41,000 jobs in February following a similar gain in January.
Average hourly wages rose 5.0% $34.82 in February after rising 5.3% in January (not seasonally adjusted).
Wage growth will need to cool down in order to bring down inflation. The BoC will not start lowering rates until inflation cools off.
Employment rose in Alberta and Nova Scotia, declined in Manitoba and was little changed in other provinces.

Consumer Prices Rise 2.9%
Consumer prices rose 2.9% year over year in January after rising 3.4% in December. It was the fourth consecutive monthly increase in consumer prices. Core CPI continued to slow, falling to 3.2% in January from 3.5% in December, according to Statistics Canada. On a monthly basis, consumer prices were unchanged in January after falling 0.3% in December.

Housing and Construction News
Housing starts fell 10% in January to 223,589 annual units after rising 249,255 units in December, according to Canada Mortgage and Housing Corp. (CMHC). The trend measure, a six-month moving average of the monthly seasonally adjusted annual rate of housing starts, fell 2% to 244,827 units in January. Despite the drop in the trend measure, actual starts were up 13% year over year, driven by high multiunit starts, particularly in Toronto.

Canadian home sales rose 3.7% in January after rising a downwardly revised 7.9% in December, according to the Canada Real Estate Association (CREA). It was the second consecutive monthly increase after seven months of falling sales. The association said prices would remain flat in Ontario, the country's largest real estate market, as well as in British Columbia.

GDP Grows 1.0%
GDP grew 0.1% in the fourth quarter of 2023 after dropping 0.5% in the third quarter, allowing the Canadian economy to avoid slipping into recession. Statistics Canada estimates the economy grew 0.4% in January. Exports of goods and services rose at an annualized pace of 5.6% in the fourth quarter, driven by crude oil and bitumen. Consumer spending rose by an annualized 1.0%, but per-capita consumption fell for the third consecutive quarter. The overall increase in spending was led by higher spending on new trucks, vans and utility vehicles as supply chain issues eased up and back orders were fulfilled. Real business investment fell for the sixth time over the previous seven quarters and businesses also slowed their investments in inventories, which created a drag on growth. Final domestic demand – a metric that includes household and government consumption, along with capital investments, fell at an annualized rate of 0.7%. Analysts noted that economic conditions are frail in Canada, and that overall numbers are being propped up by a resilient US economy.

Consumer Prices Rise 2.9%
The Consumer Price Index (CPI) rose 2.9% year over year in January after rising 3.4% in December. Much of the decline was due to falling gasoline prices. On a monthly basis, the CPI was unchanged in January after rising 0.3% in December. Consumer prices were up 2.9% year over year after being up 3.4% year over year in December.

Retail Sales Rise 0.9%
Retail sales increased 0.9% in December to $67.3 billion in December after falling to $66.6 billion in November. Core retail sales, which exclude gasoline stations and fuel vendors and motor vehicle and parts dealers, were up 0.5% in December. In volume terms, retail sales increased 0.8% in December.

Retail sales were up 1.0% in the fourth quarter of 2023, marking a second consecutive quarterly increase. In volume terms, retail sales increased 1.3% in the fourth quarter. Retail sales increased in eight provinces in December, led by Ontario and British Columbia.

In 2023, retail sales increased 2.2%, led by gains at motor vehicle and parts dealers. In volume terms, sales were up 2.3% in 2023.

Retail sales rose 2.2% in 2023 to $794.4 billion in sales, with increases in five of nine subsectors. Core retail sales increased 2.4% in 2023.

Retail Ecommerce Sales
Retail ecommerce sales fell 3.6% to $3.7 billion in December, accounting for 5.5% of total retail trade, compared with 5.8% in November.

Retail Notes
Fourth-quarter revenue fell by 16.8% to $4.4 billion compared to Q4 2022. Full-year revenue fell by 6.4% to $16.7 billion.

Across Canadian Tire’s retail banners, Q4 comparable sales fell 6.8%. Canadian Tire estimated that the weather accounted for about half of the overall sales decline. For the full year, comparable sales fell by 2.9% or 3.1% excluding petroleum.

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