Labour market recovery continuing in March, with the employment rate back above 60% -- though roughly 1.5-2 points below pre-COVID levels.
Important slack remains, though, especially among young women. Young men's employment rates have almost returned though young women remain roughly five points below pre-COVID levels.
Why the difference? Largest source of weakness in the labour market remains the sectors heavily affected by the public health crisis. Accommodation and food services will hopefully rebound relatively quickly as we get to the other side of this.
Across #cdnecon, we're just shy of 300k jobs below pre-COVID levels. Some provinces further behind than others, and BC even now exceeds its pre-COVID employment levels. Here's all provs:
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Today's data: inflation rate falls to 2.7% in April. Would have fallen more, but gasoline pushed the rate up. Shelter remains largest contributor, but pace of increase is falling.
The key Bank of Canada core measures of inflation have also remained within the target range -- lower than 2% -- over the past 3 months. This is what the bank is looking forward before lowering rates.
Here are the contributors to the drop. Most items down, but energy prices offset some of that.
This accounts for *changes* in the CPI annual rate of increase. Alternatively, had energy prices remained flat yoy, then CPI growth would have been 2.4% in April.
Today's data: inflation! 🥳 Prices were 2.9%, on average, higher in January than a year earlier. Inflation down from 3.4% in Dec. Biggest contributors to the drop were energy, food, travel. Cell phones offsetting some.
Looking at the headline rate, shelter is larger contributor. Rent accounts for ~0.5 points of the 2.9, mortgage interest costs ~1.0 points.
Important: note the strong decline in the pace of grocery price growth. Now in line with historical norm.
The decline in inflation has also been fairly broad based, with now fewer than half of items seeing a pace of price growth above 3% -- although still a larger share than normal, which is ~0.3-0.4.
This is higher than last month, true, but it doesn't mean the inflation situation is worsening. I noted this yesterday, saying 3.4% was the number to watch.
This is a *very* important point to keep in mind for the next *several* months. Even if things are completely normal month-by-month, the headline rate won't fall much over the next quarter.
As expected, inflation fell in October. A lot. From 3.8% in September to 3.1% in October. And monthly, adjusted for seasonality, prices were lower in October than Sept.
A big part of the reason is from lower gasoline prices. That's anticipated because oil prices were down. There's a tight connection between energy's contribution to CPI and oil prices (obviously). This has been a consistent story over the past two years.
You can see the size of the contribution from energy to the change in inflation since September here 👇 . Basically everything else was a net wash.
Some Alberta Pension Plan proponents are concerned about Albertans paying more in contributions than they receive in benefits. Is this "overcontribution" legitimate? If so, does it imply the CPP is unfair? Would an APP solve it?
Allow me to explain. 🧵🤓 #cdnpoli #ableg #cdnecon
The Government of Alberta regularly cites $60 billion in excess contributions over what has been received in benefits. The report commissioned by the government includes this figure. Red is Alberta. Positive means contributions > benefits. 👇
The data are accurate. You don't even need an actuary. Statistics Canada reports this annually. Total contributions from 1966-2021 amount to approximately $60 billion. Adjusting for inflation provides a clearer perspective.
The GST adds 5% to the cost of purchasing a good or service subject to this tax. Not all items are subject to it, though. I (roughly) estimate that, overall, the GST adds an average of 2.3% for consumer expenditures as a whole. (From here: )www150.statcan.gc.ca/t1/tbl1/en/tv.…
So, eliminating the GST would drop the CPI by 2.3%. Since the latest inflation reading is 3.8%, that would leave us at 1.5% (assuming nothing else changed). And 1.5% is 61% lower than 3.8%.