Wednesday, July 23rd17.1°C
21452
21901

Short-term indicators, U.S. jobs jump point to stronger Canadian economic growth

OTTAWA - Canada's economy is exhibiting signs of warming with the weather, as the end of winter's deep freeze appears to have set the stage for a second-quarter thaw.

The Conference Board is the latest to detect improving conditions, saying Friday that its composite leading index had advanced 0.4 per cent in March, while also revising the February measure upward to 0.4 per cent.

The most encouraging signal, however, was fresh labour data from the United States showing that its economy had created 288,000 jobs in April — while also upgrading the employment numbers for February and March — to post the best U.S. unemployment rate in more than five years: 6.3 per cent.

"Our view now is we will get a little stronger U.S. economy in the second quarter and rest of the year and hopefully we'll benefit a little better than we have on the trade side," said Pedro Antunes, deputy chief economist with the Ottawa-based think-tank.

Scotiabank economists Derek Holt and Dov Zigler said the U.S. jobs number "is consistent" with their call for four per cent growth in the U.S. economy in the second quarter, the April to June months.

The big mover in the Conference Board's March composite index, a forward-looking measure that tracks 10 different elements of economic activity, was on the exports side, a welcome development for the Bank of Canada.

In recent statements to Commons and Senate committees this week, Bank of Canada governor Stephen Poloz voiced concern that exports have not adequately tracked U.S. demand, suggesting Canada may be missing out on up to $40 billion in exports. But he added that going forward he expects shipments will rise with demand.

On the positive side, he also flagged the possibility that the U.S. recovery may accelerate faster than the bank's own forecast predicts, noting that forecasters often undershoot the pace of recovery once it takes hold.

The bank has long held that it will take a fully realized U.S. recovery to not only light a fire under Canadian exporters, but also instill confidence among corporate leaders to invest in capacity-generating equipment and to significantly increase hiring.

This is especially critical to the Canadian economy going forward, said Antunes, because the composite indicator also points to softening housing sales and consumer spending. As well, government austerity, particularly at the federal level, is not helping out growth.

At present, Antunes said the most likely scenario is that the spring forward in economic activity is mostly a bounce-back from the winter slowdown and hence short-lived, although that could change if the U.S. recovery is strong.

Canadians will get additional evidence of where the economy is headed next week when Statistics Canada releases three key indicators — on merchandise trade for March, and housing starts and employment data for April.

The Canadian Press


Read more Business News

22447


Recent Trending




Today's Market
S&P TSX15315.13+65.14
S&P CDNX1010.884.40
DJIA17113.5461.81
Nasdaq4456.016+31.312
S&P 5001983.53+9.90
CDN Dollar0.9329+0.0016
Gold1313.40+4.2001
Oil104.30-0.29
Lumber332.50+6.20
Natural Gas3.785+0.013

 
Okanagan Companies
Pacific Safety0.200.00
Knighthawk0.01-0.005
QHR Technologies Inc1.19+0.04
Cantex0.06+0.005
Anavex Life Sciences0.33-0.018
Metalex Ventures0.07+0.005
Russel Metals35.60+0.61
Copper Mountain Mining2.83+0.14
Colorado Resources0.215+0.015
ReliaBrand Inc0.10+0.019
Sunrise Resources Ltd0.025-0.005
Mission Ready Services0.19+0.01

 



21623

FEATURED Property
20059753822 Dale Lk Rd
$334,000
more details
image2image2image2
Click here to feature your property
Please wait... loading


Labour shortage in BC

The mainstream media are finally waking up to something unusual in British Columbia – a labour shortage. If the experience of Alberta is a guide to our own future, the highly skilled labour will...


Learn to delegate effectively

Photo: ContributedI have the pleasure of witnessing people delegate tasks quite often. Sometimes with tremendous success and sometimes with disastrous consequences. I have chaired a lot of committees...


Euro debt woes re-emerge

Big Picture Euro debt woes re-emerge Europe’s debt woes jumped back into the headlines this week trumping other economic, geopolitical and corporate developments. Word that one of Portugal&rsquo...

_








Member of BC Press Council


22097