During the previous week, statistics for the Canadian economy and job market were published for last month and last quarter. Persons considering immigration and job prospects in Canada have mixed news to consider, with some regions being more favourable currently than others. Overall, the economy is slowing a bit more than predicted recently, yet it remains stable and healthy.
The Gross Domestic Product (GDP) was reported as unchanged during May, after a mere 0.1% growth during each of the months March and April. A 0.3% increase in GDP had been predicted.
Economic growth would have accordingly been approximately 3.2%, but it now appears it will be just over 2% for the April, May and June second quarter of 2006. This is an increase of 2.6% from May, 2005. Experts predict that the economy will grow approximately 2.7% for the second half of 2006.
While disappointing, it is not necessarily bad news. The Bank of Canada is almost certain to keep interest rates unchanged when it makes its decision in September. Businesses will generally benefit with lower interest rates, which they may now likely plan on for the remainder of the year.
There had also been concerns about the Canadian dollar trading too high against the U.S. dollar. Currently it is trading between 88¢ and 89¢ US, down from a 25 year high of over 94¢ US.
Overall and core inflation are both down by 0.3%, a pleasant surprise. The Bank of Canada has a target of keeping core inflation (excluding volatile components like energy and cigarettes) under 2%, and it is currently at 1.7%. Overall inflation dropped from 2.8% to 2.5% from May to June. Large hikes in gasoline prices and a 35% jump in housing prices in Alberta accounted for inflation remaining as high as it is for the quarter.
The unemployment rate took a small, surprise jump between May and June, up 0.3% and now at 6.4%. It had been expected to remain nearly flat. The jump is attributed to a loss in manufacturing, construction and factory jobs concentrated in central Canada, along with a large loss in part-time work.
On the plus side, there was a gain of 21,600 full-time jobs, largely concentrated in professional work. A combined 23,500 new part-time and full-time jobs had been expected for the month. Professional, scientific and technical services continue to experience strong growth, offsetting losses in manufacturing, construction and part-time work.
According to Statistics Canada, 1,136,700 people were without jobs in July, while 16,504,800 are working.
This places the over-all jobless rate for all Canada down 0.1% from the 6.5% unemployment reported in January. Some provinces, such as Alberta at 3.6% and Manitoba at 4.7% unemployment, are significantly below the national average. Ontario and Quebec are struggling in some sectors and are expected to continue so for the foreseeable future.
Two straight months of weak employment performance isn't enough to conclude Canada's economic expansion is at an end. It is important to remember that 210,000 jobs have been created so far this year, compared to 233,000 total for all of 2005. Average monthly job creation is considered to be reverting back to a more normal level after unusual growth in the past two years.Related:
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