Date: August 6, 2010
US Employment Situation, July 2010 Results
Source: United States Department of Labor, Bureau of Labor Statistics
Link to Release: http://www.bls.gov/news.release/pdf/empsit.pdf
Summary: The American economy shed 131,000 positions in July as temporary workers hired for the decennial census completed their work and were laid off. Private-sector employment edged up by 71,000. The manufacturing sector added 36,000 positions in July and health care created 27,000 jobs. Private sector gains were more than offset by the 202,000 federal government positions eliminated during the month. The unemployment rate remained unchanged at 9.5 per cent suggesting that the size of the labour force shrank as fewer people looked for work.
Analysis: The US labour market continued to disappoint in July. Before analyzing the results, however, it is important to remove the effect of the temporary Census jobs that resulted in a large positive spike earlier in the year, which is now balancing out. The real story (or issue) is the slow growth in private sector jobs, whether in goods production or the service sector. Growth in US private sector employment needs to be at least three times the July result to make a dent in the unemployment rate. Moving forward, the prospects for sustained private sector job growth have been clouded by slower than expected GDP growth and declining consumer confidence in the second quarter.
Looking to Buy or Sell? Contact Me for a FREE Consultation!
Date: July 30, 2010
Canadian Gross Domestic Product, May 2010
Source: Statistics Canada
Link to Release: http://www.statcan.gc.ca/daily-quotidien/100730/dq100730a-eng.htm
Summary: Canada’s real Gross Domestic Product (GDP) edged up 0.1 per cent in May compared to June, which amounts to 1.5 per cent on an annualized basis. This small increase followed virtually no growth in April. While the GDP contribution from the goods producing sector climbed 0.6 per cent during the month, the service sector contribution fell 0.1 per cent. The service sector dip was due to lower activity in wholesale trade and by real estate agents and brokers, where activity was down 11.3 per cent. The construction component of GDP also fell 1.6% in May, led by a 3.8% drop in residential construction.
Analysis: Following seven months of very strong economic growth in Canada, the April and May GDP results were certainly below expectations. These less than stellar results are calling into question most forecasts for second quarter GDP, including the Bank of Canada’s revised forecast of a 3.0 per cent annualized rate of growth. For this forecast to be realized, annualized GDP growth in June would have to be approximately 8.0 per cent, or one of the strongest monthly rates of growth on record. Lower than expected GDP growth may suggest that that future consumer price growth (inflation) may not be as strong as currently forecast. Given that the Bank of Canada bases its target for interest rates on future inflation expectations, it is possible that the pace at which the Bank raises its target for the Overnight Lending Rate may turn out to be slower than expected.
Looking to Buy or Sell? Contact Me for a FREE Consultation!
