Canadian Personal Finance Blog

Archive for the ‘Economy’ Category

Friday, Stats Canada published their monthly update on the Labor Force Survey for January and the numbers were a little better than the prognosticators were guessing, as employment increased by 43,000 jobs last month (the number bandied about I had heard was 15,000), which actually pushed the unemployment rate down 1/10% as well.

This is relatively good news, given the gloom and doom from the stock markets and the commodities world of the past few days (at the end of last week).

Employment gains in January were driven by women aged 25 to 54 and youths. This was the first notable increase for youths since the start of the employment downturn in the fall of 2008.

So more part time jobs, but at least work is out there, for the youths.

Employment Curve up to January 2010

Unemployment dropped a little, which should make folks happier, but it is still well over 8% which is a number that does not reflect a healthy thriving economy.

Unemployment Graph up to January 2010

Much of the gains were seen in Ontario (30,000), but Ontario’s unemployment rate stayed at 9.2% as more folks were also looking for jobs, which means unemployment is actually on an upward trend since the summer.

The Big Table

Here is the Big table from Stats Can, find your age group and see what happened to folks of your age and gender.

NFB is launching a new web expose on the economy at the Micro level (i.e. your and my level) and what the macro changes do at the Micro level, it is called GDP , and looks to be an interesting project to watch, official web site.

Given the recovery in the markets over the past little while it is not surprising to hear Pension funds claiming they are on the road to recovery, and now CPP claims their assets are up $11B in the first quarter of this year (which is good news). This kind of growth is needed given the losses most pensions took during the great Apocalypse of ‘08, however is the Canada Pension Plan going to be able to withstand the onslaught of retirees which will live much longer over the next 30 years?

“We are pleased with the $11.1 billion increase in the fund and the positive 7.1 per cent return for the first quarter,” CPP president David Denison said. “At the same time, the negative returns of our past fiscal year and the positive results of this first quarter both need to be viewed within the context of our long-term strategy. We continue to focus on delivering solid returns over the span of multiple years and indeed decades.”

Since the CPP folks have started investing they have managed about a 4.9% return on their assets (over 10 years) so that is a better thing, but the nagging questions are:

• Can the fund sustain and continue to pay out to the tidal wave of retirees coming in the next 10 years, or will the government be forced to change the system?
• What is the percentage of Canadians who will only be using the CPP for their retirement?

As I grow older this worries me more and more.

Stats Canada published their May 2009 numbers today and it is up but only 0.1% over the previous twelve months, which is good to see (for those of us who worry about inflation).  This means that prices are supposedly only up 1/10 of 1% over the previous twelve months (as close as you can get to ZERO (without being zero)).

The number is a little deceiving since the report does say:

The slowdown in the 12-month Consumer Price Index (CPI) was primarily the result of an 18.3% year-over-year price drop for energy products. Excluding energy, the CPI rose 2.3%.

Thus without the drop in gas and energy prices CPI is actually around 2.3% which sounds more realistic. With the spiking of gas and oil prices for the summer this could make for more interesting numbers in the coming months, unfortunately.

1/10 of 1% Inflation? Wow!

Gas Prices Down (for Now)

The following graph is even more interesting and shows just how volatile gas prices have been for the past little while:

Volatile to say the least!

The Big Price Picture

So how did all of this break down? Energy prices down a great deal, however, food prices are UP a large amount as well, so we have two volatile components in the index, whereas most other components are quite calm.

This does not bode well for those on fixed incomes having to deal with higher food prices (as well as those that are living near the poverty line).

As usual I am including the “big table” to show you the components of the CPI and where the biggest jumps are:

With Lent beginning, tax season roaring into view and the RRSP season coming soon to an end some very interesting posts were done this week, for the end of February.

• Larry MacDonald wrote an excellent article for the print Globe and Mail where my comments were included A Relief Valve for RRSP Holders. I was very happy to see they included a picture of my son’s bum as well.
• The Canadian Capitalist advises us to Keep Faith in Buy and Hold, which I think is important to remember, even with recent fluctuations.
• Michael James points out that It’s Different This Time, or is it? I’ll tell you in a few years, since we never know until it happens.
• Preet asks the interesting question How are the Pros Investing Their Money  (ok he quotes the Wall Street Journal). Preet was also mentioned in Larry’s G&M article as well, and is always and interesting read.
• Gail Vaz Oxlade talks about an important topic for me Starting an Allowance for kids, something kids need to learn about.
• Ellen Roseman asks a pointed question Can You Trust Your Financial Adviser ?  
• Nancy Zimmerman shares Here is What I am doing with my RRSP. What Are you Doing with Yours? She thinks it is a buyers market, but my question is, are we at the bottom?

Have a great weekend all, and watch for the Ultimate Canadian Get Rich Quick scheme video.