Sub-1% employment growth the new norm, plus a look at demographic projections

Chart 1 Population and employment estimates and projections 1976-2050
Chart 1 Population and employment estimates and projections 1976-2050
Source(s): Statistics Canada and Finance Canada estimates and projections

As noted in the previous  post (see Family Tax Cut), the effect the demographic shift will have on labour supply may be overstated. Its ill-advised use of Kijiji data aside, the Jobs Report published last February by Finance Canada included labour market projections. 2014 was projected to be the last year with employment growth of 1.0 percent or greater, and the binding constraint on future growth was projected to be labour supply. The first projection missed out of the gate, and the limited data available suggests the second may not prove any more reliable.

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Family Tax Cut: A potentially helpful tax policy, undermined by politics (or This is why we can’t have nice things)

Primarily single income, middle-class families, whether by choice or by chance, shouldn’t be penalised relative to their two income counterparts when paying taxes on the same earnings. Framed as such and designed solely to address this income disparity, the federal Family Tax Cut (FTC) would not be terribly controversial. But that’s not how it was designed, and the fallout has been all too typical of the increasingly hyper-partisan political environment in Ottawa.

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January 2015 IMTS: What’s one to make of conflicting Canadian trade reports?

Chart 2 Trade Balance Statcan

Statscan’s January 2015 Canadian International Merchandise Trade Statistics (IMTS) report released today read about as badly as such a report could. To put the January results into historical perspective, it notes: “Canada’s merchandise trade deficit widened from $1.2 billion in December to $2.5 billion in January, the largest since the record $2.9 billion deficit in July 2012.” Further: “Canada’s trade surplus with the United States narrowed from $2.2 billion in December to $1.2 billion in January, the lowest surplus since 1992.”

Why, it almost seems like it was just yesterday that the virtues of export-led economic growth were being touted…

Chart 2 Canada Net Exports BMO

Actually, it was two days ago BMO Financial’s AM Charts March 4 ,2015 daily brief included a note, captioned Canadian Exports: Can’t Ask for Much More, that stated: “the BoC can’t complain that exports aren’t carrying the growth baton. Look for that trend to continue in 2015 as
a weaker dollar and firming U.S. growth help.”

So how does one account for the glaring discrepancy?

The Statscan IMTS report, which includes the first chart above, strictly looks at international merchandise trade, Except for a few positive months in 2011 and early last year, it’s pretty much been negative for the last 5 years. The bump early last year coincided with a period during which the Canadian dollar had started to slide prior to the precipitous plummet in oil prices.

Statscan’s Q4 and December Canadian economic accounts report was released just three days prior to its IMTS report. The economic accounts reports looks at demand, including info on international trade of both goods and services. The latest report noted a marked drop in economic growth stemming from the oil price drop:  seasonally-adjusted Q4 growth of 0.6 percent was a significant decline from Q2 growth of 0.9 percent (preliminary results, likely to be further revised down).

The economic accounts seasonally-adjusted trade data appear to show the same trend as the IMTS report did: Canadian exports rose during the brief period in early 2014 when the loonie was lower (than its historcal height in recent years) but oil prices were still relatively stable. The plunge in oil prices starting mid-year that coincided with a marked drop in Canada’s petrodollar significantly gave back those gains. The consistency between the two reports isn’t surprising, since services make up a relatively small share of Canadian international trade.

So how/why do the Statcan and BMO charts showing net exports appear to be markedly different? BMO’s chart shows annualised net exports and presents them as a share of GDP; strong export growth in early 2014 is rolled in with relatively weaker economic growth over the entire year to suggest a trend that should reasonably be expected to “continue in(to) 2015″.

2013 SHS: A few questions in light of the upcoming CPI basket update

Figure 1 SHS response rates 1997-2008
Source: The Importance of the Long Form Census to Canada, David A. Green and Kevin Milligan, Canadian Public Policy – Analyse de politiques, vol. xxxvi, no. 3 2010

This Thursday, Statistics Canada will be updating the Consumer Price Index (CPI) basket weights with the latest results from its 2013 Survey of Household Spending (SHS). While this CPI basket update will be the second undertaken since a major SHS redesign in 2010, little information about the household spending survey has been made publicly available since then. Statscan stopped producing public use micro data as well as data quality reports for the SHS immediately following the redesign.  The official reason: “There will be no public use microdata file (PUMF) for SHS 2010 due to resource constraints.”

Statscan’s sudden lack of transparency following years of declining data quality and a significant overhaul of its key household spending survey is cause for concern.

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Fluctuating self-employment data a sign of Canada’s weak labour market (Includes Correction*)

Chart 1 Part-time self-employment by sex, seasonally adjusted and unadjusted
               January 1987 to December 2000Chart 1 Part-time self-employment by sex, seasonally adjusted and unadjusted Jan1987-Dec2000

 Source: CANSIM Table 282-0019 Labour force survey estimates (LFS), Statistics Canada
*downloaded February 11, 2015

 

Chart 2 Part-time self-employment by sex, seasonally adjusted and unadjusted
               January 2001 to December 2014Chart 2 Part-time self-employment by sex, seasonally adjusted and unadjusted Jan2001-Dec2014

 Source: CANSIM Table 282-0019 Labour force survey estimates (LFS), Statistics Canada
*downloaded February 11, 2015

Developing…

Note: Chart data was seasonally adjusted using TRAMO-SEATS from Banco de España. For more information, see Empirical Evaluation of X-11 and Model-based Seasonal Adjustment MethodsU.S. Bureau of Labor Statistics, December 2007.