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The composite leading index dipped 0.2% in September, after a 0.3% gain in August capped a string of five consecutive increases. Most of the reversal originated in a sharp drop in the stock market; excluding it, the composite index would have been unchanged. Overall, five of the nine other components retreated, while one was unchanged.
The smoothed version of the Toronto stock market fell by 3.1%, its first decline since March due to a 14.7% drop in the unsmoothed version.
The leading indicator for the United States fell for the 13th straight month, dating back to the onset of the global credit crisis in August 2007. The year-long weakness in autos and housing was followed by a further deterioration of labour market conditions. Nevertheless, consumer confidence recovered as the price of gas receded.
The outlook for a continued recovery of Canada's manufacturing sector was marred by weaker US demand. New orders contracted 2.1% after two months of growth, led by lower demand for capital goods other than aerospace products. The ratio of shipments to inventories was unchanged, as both shipments and inventories increased at the same rate for the third month in a row.
The buoyancy of household demand earlier in the year faded over the summer. While demand continued to grow for furniture and appliances, spending on other durable goods fell 0.3% for the second straight month. It had risen by over 1% a month early in 2008, just after the Goods and Services Tax was cut. The housing index edged down for the fourth straight month, as slower sales of existing homes outweighed a rebound in housing starts. Services employment remained buoyed by the personal sector. While jobs expanded rapidly in September, total employment edged down 0.1% in the third quarter.
Available on CANSIM: table 377-0003.
Definitions, data sources and methods: survey number 1601.
This release will be reprinted in the November issue of Canadian Economic Observer, Vol. 21, no. 11 (11-010-XIB, free). For more information on the economy, consult the Canadian Economic Observer.
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.
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