Review of Economic Statistics — June 15, 2018

Release date: June 15, 2018

Review of Economic Statistics — June 15, 2018 - Transcript

(The Statistics Canada symbol and Canada wordmark appear on screen with the title: "Review of Economic Statistics — June 15, 2018")

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Richard Evans: Welcome to the Review of Economic Statistics.

Guy Gellatly: I'm Richard Evans.

Richard: And I'm Guy Gellatly. Guy, our focus today is on households and their finances. We're going to be looking at the national balance sheet results and we'll also look at the employment report. The discussion will be rounded out by some numbers on manufacturing. So let's first focus on households. I understand that we now have information on the assets and liabilities and the net worth of households. We saw previously in first-quarter GDP that household spending had decelerated somewhat. How are they doing from the point of view of their assets and liabilities?

Guy: Well, Richard, the net worth of the household sector— and that's basically total household assets minus household liabilities— that edged lower in the first quarter. It was down slightly, 0.2%, and it's the first decline in those numbers that we've had since the third quarter of 2015.

(Text on screen below presenters: Household net worth edged lower in the first quarter of 2018.)

Richard: So, those kinds of declines are not frequent. Did the slowdown and some of the asset markets have something to do with that?

Guy: Well, a couple of contributing factors there, Richard. Really, it was certainly the reduction in the value of the financial assets for households. You want to think of those lower equity numbers that we saw really through the first quarter. We had some weakness in housing values as well and that also played a role.

Richard: Now, what else stood out in that report?

Guy: A couple of points to note: the pace of household borrowing certainly slowed in that first quarter and, secondly, the ratio of credit market debt to disposable income. Now credit market debt is basically total household liabilities in terms of mortgage loans, non-mortgage loans, consumer credit. The ratio of all of that to disposable income also edged lower in the quarter. So basically what that means is you're seeing more growth in terms of household incomes. And the pace there faster than what we're seeing on the debt side.

Richard: Excellent. Now if we turn away from assets and liabilities and look at incomes and jobs—the jobs report is out for May. So what was the big news there? I understand it was a bit of continuity… a very similar report to the previous months.

Guy: Yeah, basically no change in that headline jobs number in May—that's been the case for two months now. If you look at the labour force data on trend, basically we've seen no net increase in total employment, really, over the first five months of the year. But those unemployment rates—I mean, they're still sitting down at historic lows. Nationally, they've been at 5.8% now for the past four consecutive months.

(Text on screen below presenters: Canada's unemployment rate remained at 5.8% in May.)

Richard: So no change there, but what about wages? I understand wages have been picking up.

Guy: Well, that's one area where we actually have seen some acceleration in those data. And we've seen that really through the first part of 2018. So an example—if you want to look at average hourly wages for full-time employees—we typically measure those year over year, and they're up 3.5% in May.

Richard: That's quite a strong raise, isn't it? Very good. So let's turn our attention to manufacturing, briefly. The April report is just out. We saw some growth in the immediately preceding months, but what happened in April?

Guy: Lower manufacturing sales in April, they were down 1.3%, and that really reflects lower volumes, so real activity in the sector was essentially down. We did have some higher manufacturing prices in the months. The real story behind that decline is really lower sales for petroleum refineries, and that reflects some of the shutdown activities that we had in that sector in April.

(Text on screen below presenters: Manufacturing sales declined 1.3% in April.)

Richard: Right. So thank you for joining us. I would urge you all to examine our new Canada and the World Statistics Hub. We've recently added some new countries. All the countries of the G7 are now represented in this interactive tool that allows its users to examine Canada's key trading relationships with its key partners. For more information, please consult our website.

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