Job swings continue to cloud near-term economic outlook

Morningstar Equity Analysts 14 July, 2013 | 6:00PM
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Canada's roller-coaster ride of job creation continued after a stellar May was followed by a lacklustre June. Last month, the Canadian economy shed 400 jobs. While this was not as bad as the 7,500-job decline most were expecting, the 32,400 loss in full-time positions was the worst showing since December 2011. The unemployment rate held steady (at 7.1%) as did the pace of wage growth, which was once again up 2% from the year-ago period.

Elsewhere, economic data points continue to send mixed signals. Canada fell into a trade deficit early last year and has not yet been able to pull itself out of it. While the deficit narrowed by $648 million in May, the $303-million deficit marked the 17th consecutive month the country was in the red. While imports actually fell in May for the first time all year (3.2%, thanks to a decline in crude shipments), exports fell at an accelerated rate (1.6%). Although Export Development Canada has hinted the worst might be over in Europe and the United States, it is difficult to have real conviction about the near-term direction of the economy.


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Morningstar Equity Analysts  Morningstar’s Equity Analysts apply a consistent, forward-looking, and proven global methodology that focuses on long-term fundamental valuation, competitive advantages (economic moats), risk, financial health, and stewardship. Our bottom-up approach includes site visits and frequent interactions with company management and other industry participants to foster deeper analytical insights.

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