Economy-wide output edges higher in August

Real gross domestic product edged up 0.1% in August, matching the gain in July. Increases in crop production, retail trade, and public sector activity supported the headline gain, while lower output in manufacturing, mining and oil and gas extraction, and construction weighed on growth. Economy-wide output has expanded for seven consecutive months and has risen 4.0% since August of last year.

Retail trade rose 1.2% in August, led by higher volumes at gasoline stations as prices at the pump continued to decline from highs in the spring. Increases in retail volumes were broad-based, with many store types partly rebounding from lower activity in July.

After steady gains in late 2021 and early 2022, factory output fell in August for the fourth time in five months. Durable manufacturers reported their largest decrease since September 2021, reflecting declines in wood products and non-metallic mineral products. Combined output at automakers and parts suppliers was down for the third time in four months and was 16% below pre-pandemic levels.

Statistics Canada’s advance estimate indicates that real gross domestic product edged up 0.1% in September, pointing to a 0.4% increase in the third quarter.

Food and shelter prices continue to rise in September as headline inflation eases

Headline consumer inflation slowed to 6.9% in September, down from 7.0% in August. September marked the eighteenth consecutive month that the headline rate has been above three percent, and the seventh consecutive month above six percent. Headline inflation has eased in recent months on lower prices at the pump. Excluding gasoline, annual price growth rose to 6.5% in September, up from 6.3% in August.

Food prices continued to rise in September. Grocery prices, measured year-over-year, were up 11.4%, the largest yearly increase since 1981. Shelter costs also rose in September. Annual price increases for owned accommodation were 6.5%, up from 6.2% in August.

Sizeable employment gains in October as the unemployment rate holds steady

Headline employment rose by 108,000 in October, fully offsetting cumulative losses from May to September. All of October’s headline gain reflected increases in full-time work. Gains were also concentrated among private sector employees and core-age workers. October’s headline marked the largest monthly increase since the labour market rebounded from Omicron-related restrictions early in the year.

Employment gains in October were broad-based across industries. However, employment fell in wholesale and retail trade, and natural resources.

The unemployment rate held steady at 5.2% in October as more people participated in the labour force, led by increases among young women and core-age men. The unemployment rate among 25 to 54 year-olds fell to 4.2%, while the proportion of core-age workers that were employed in October rose to 84.5%, led by increases among men. Employment rates among both core-age men and core-age women remain well above their pre-pandemic benchmarks.

Average hourly wages, measured on a year-over-year basis, were up 5.6% in October. Higher-paid employees have been more likely to receive a pay raise over the past year. Among workers who have been with their employer for at least a year, nearly two-thirds with wages above $40.00 per hour had received a raise, compared to half of those making $20.00 per hour or less.

October’s employment report also examined the prevalence of financial difficulties within the context of concerns over rising living costs. More than one in three Canadians (35.3%) aged 15 and older live in households that found it difficult or very difficult to meet its financial needs in October, up from one in five in October 2020. These financial needs include paying for transportation, housing, food, clothing, and other necessary expenses.

Source: StatsCan