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The composite leading index rose 0.4% in September, a slight improvement on its 0.3% gain in August. More importantly, the index showed little or no effect from the turmoil in some parts of financial markets that began in mid-August. In particular, there were concerns that unsettled financial market conditions would affect output and employment, but strong gains in housing starts and jobs in September showed that these were unfounded.
Household demand remained the driving force behind growth. The housing index leapt by 5.3%, its largest gain in almost six years, due to higher housing starts. Spending on durable goods also accelerated. Strong consumer demand for services was the largest contributor to the growth of services employment.
Financial market conditions improved in September after slowing over the summer. The stock market rebounded 1% due to widespread gains.
The manufacturing sector remained mixed, with new orders rising, the average workweek declining and the ratio of shipments to inventories remaining unchanged for a second straight month.
The US leading indicator also was unchanged. Housing market conditions deteriorated late in the summer. Instead, exports and business investment took the lead in growth.
Available on CANSIM: table 377-0003.
Definitions, data sources and methods: survey number 1601.
This release will be reprinted in the November 2007 issue of Canadian Economic Observer. For more information on the economy in September, consult the October 2007 issue of Canadian Economic Observer, Vol. 20, no. 10 (11-010-XWB, free), now available from the Publications module of our website.
For more information, or to enquire about the concepts, methods or data quality of this release, contact Philip Cross (613-951-9162; ceo@statcan.gc.ca), Current Economic Analysis Group.
Table(s).
