Don’t look now, Canada’s economy is getting ugly

Originally posted at Maclean’s.

Oooph. That’s about the best way to sum up the state of Canada’s economy after a barrage of awful economic reports in recent weeks.

First up was fresh evidence that Canada’s manufacturing sector is struggling, despite all the support it’s received from cheap oil, the low loonie and a strengthening U.S. economy. Factory sales fell in May by 1 per cent, the third monthly drop this year.

After that, we learned Canada suffered the steepest monthly decline in GDP since 2009, as the full impact of the Fort McMurray wildfires caused the economy to shrink by 0.6 per cent in May. As Statistics Canada noted at the time, the majority of the downturn was due to the fires, but not all of it. In fact, in three of the first five months of 2016 that we have data for, Canadian real GDP declined on a monthly basis, even when the beleaguered oil sands are taken out of the picture.

Then on Friday we got a double whammy of awful news on the jobs and exports fronts. First, the wallop from Statistics Canada’s labour force survey—the country lost 31,000 in July, a far, far cry from the 10,000 new jobs that were expected to be created. Ontario in particular was hit hard, losing more than 36,000 positions.

Perhaps one of the most troubling aspects of the jobs report, though, was that hourly wage growth has hit a wall, climbing just 1.8 per cent over last year, compared to an annual gain of 3.25 per cent in February. When combined together the drop in employment, slumping wage gains and stagnant growth in hours worked paint a picture of a labour market in distress.

Read more at Maclean‘s.

Also read:

Snapshot: Canadian economic data

U.S. trade deficit widens, dragging on growth

Toronto real estate hits record sales for July