Review of Economic Statistics — September 7, 2018 - Transcript
(The Statistics Canada symbol and Canada wordmark appear on screen with the title: "Review of Economic Statistics — September 7, 2018")
(Background music plays while title card with the text "Review of Economic Statistics" appears on screen.)
Richard Evans: Welcome to the Review of Economic Statistics. I'm Richard Evans.
Guy Gellatly: And I'm Guy Gellatly.
(Text on screen below presenters: "Richard Evans, Director General, Industry Statistics. Guy Gellatly, Principal Researcher.")
Richard Evans: Guy, we're looking at two really interesting reports today: one on the overall pace of growth in the second quarter—the GDP report—and one on employment for August. And let's start with that one. We remember that employment spiked in July—strong growth there—did that happen again in August?
Guy Gellatly: Richard, in word, no. Employment down 52,000 in August, basically offsetting that gain that we had in July. Part-time employment, in particular, was down 92,000. A lot of those losses were concentrated in Ontario. So at first blush, you look at the report, and it looks a lot like the mirror image of what we had in July.
(Text on screen below presenters: "Employment declined 52,000 in August on lower part-time work.")
Richard Evans: Yes.
Guy Gellatly: You dig a little more deeply, though, into the data, certainly on the industry side, and it's a different story. I mean, lower employment in professional services, in retail and wholesale really contributing to the decline in the August number.
Richard Evans: So what did all of this do to the unemployment rate?
Guy Gellatly: Unemployment rate was up at 6%, and it's basically fluctuated within that 5.8 to 6 range now really since late last year.
Richard Evans: Okay. So if you take that long view—that longer view—then what's your main takeaway from the report?
Guy Gellatly: You know, it's interesting. I think when you're making assessments like that, you always do want to look at a longer span of data. So if you look on trend back to the start of this year, we certainly have seen a more moderate pace of employment growth both for the country as a whole and now we're seeing that in terms of Ontario as well. I will note, though, that there's a fair amount of momentum still on the full-time side in those Ontario numbers. A lot of the swings that we're seeing are really happening in terms of part-time employment.
Richard Evans: Very good. Let's look at GDP now for the second quarter. The economy had settled into a pattern of slower growth since the middle of 2017. I understand that changed in the second quarter.
Guy Gellatly: Yeah, an acceleration in the second quarter. Economic growth came in at 0.7%. That follows that 0.4 in Q1.
(Text on screen below presenters: "Economic growth accelerated to 0.7% in the second quarter of 2018.")
Richard Evans: So almost double.
Guy Gellatly: Yeah. Basically our strongest quarterly numbers since the first half of last year.
Richard Evans: Very good. And the main cause of that, was it exports by any chance?
Guy Gellatly: Yeah. Exports actually were the story in many ways. Export volumes up 2.9%. Basically, their contribution to growth on the quarter was as strong as it's been…basically, you'd have to go all the way back to the second quarter of 2014. So, before that long trend decline in energy prices. So the story with the export number: strong energy exports, certainly, but a lot of support coming on the non-energy side as well, particularly from consumer products and from aircraft.
(Text on screen below presenters: "Higher exports were the main contributor to real GDP growth in the second quarter.")
Richard Evans: Alright. Speaking of consumer products, let's talk about household spending. That was sort of a foundation of 2017, but a disappointing first quarter. What did the second quarter look like for households?
Guy Gellatly: We did see an acceleration… Richard Evans: For spending…
Guy Gellatly: …in the second quarter, came in at 0.6. This comes after sort of three consecutive quarters where the pace of growth in terms of household spending had been slowing. So some acceleration there. Not the sort of growth that we saw, if you go back to the first half of last year, when spending on autos was really contributing to some pretty strong numbers on the household side.
Richard Evans: And residential investment? Negative in the first quarter… what happened in the second quarter?
Guy Gellatly: A slight positive in the second quarter. It was up slightly, but some interesting patterns in those data. There's some offsets there, so lower resale activity, lower new construction basically being offset by higher expenditures on renovations.
Richard Evans: Great. And business investment?
Guy Gellatly: Business investment was up. It was a more moderate number in Q2, so again, you're coming off a fairly strong first quarter. If you look at all of the different components there, whether it's machinery and equipment, non-residential structures, even intellectual property, you're seeing a more modest gain really in Q2.
Richard Evans: So all those final demand categories we've just been talking about, if I kind of sum up there the whole picture, we're talking about an acceleration in growth overall, strongly export driven, supported to a lesser extent by household expenditure and with very modest gains—modest, almost no support, in fact—from residential investment and business investment.
(Chart on screen: Contributions to real GDP growth, selected components)
Guy Gellatly: Correct.
Richard Evans: That's correct? Not bad. Alright, and to close out, we just want to bring to the attention of our viewers the publication of new data on the digital economy, and so for that and so much more, please consult our website.
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