Surprising Job Picture in Canada in January

A surprising job picture from the Canadian Economy grew more jobs in January (2017), according to Stats Canada. This was unexpected by most economists, so a pleasant surprise (somewhat).

What Kind of Jobs ?

Surprising Employment Picture

Surprising Employment Story
(From Metropolitan Museum of Art Collection)

The unfortunate part of this story is that the economy is creating more part-time jobs (full-time job numbers are virtually unchanged). Why is this economy creating part-time jobs, or is that what is needed?

There is an argument put forward that as the population ages, maybe part-time jobs are what the older folks want? It can’t be that young folks want to have many jobs, with little or no benefits, can it?

Part-Time Jobs

The telling statement from the article is the following:

Despite little change in January, part-time employment was up on a year-over-year basis (+190,000 or +5.6%). In January, 19.6% of employed persons worked part time, compared with 18.8% the same month a year earlier.

Why a growing part-time work force ? This would be a very interesting report if I could find it somewhere.

Unemployment & Employment Graphs

Surprising job picture

Employment & Unemployment Seasonally Adjusted

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You Are Spending More

Stats Canada published a very interesting report last week, Survey of Household Spending, 2015, which on first read sounds obvious.

Canadian households spent an average of $60,516 on goods and services in 2015, up 2.5% from $59,057 in 2014.

If we remember inflation in 2015 ran at a slim 1.6%, which means that Canadians spending increased 0.9% (after adjusting for inflation).

Of this spending the breakdown of what we bought is fascinating as well:

  • Food 14.3%
  • Shelter 28.9%
  • Transportation 19.4%
  • Household operations, furnishings and equipment 10.9%
  • Clothing and Accessories 5.6%
  • Miscellaneous (?) 2.8%
  • Education & Reading Materials 3.0%
  • Alcohol, tobacco and games of chance 2.5%
  • Recreation 6.6%
  • Health and Personal Care 6.0%

Your Household Spending

Why is this of interest to you, and your personal finance plans? Do these numbers reflect your spending? Are you an average Canadian ? You don’t know? I think  you should. If you cannot compare how much you spend to these numbers, you are not in control of your finances.

The other thing is, that if you don’t have these numbers at hand, go with the assumption that you are close to these numbers. If you make that assumption, you can:

  • Start tracking your spending from this point (so you can figure out where you spend money)
  • Use these numbers to try to lower your overall spending

Some areas where you might try to lower your spending are hard to change (Shelter is the big one, it is very hard to lower your rent or mortgage (you can, but it is hard)).

Finding Savings in Data

In my opinion these areas scream out as being areas where you could start trimming spending:

  • Transportation, if you have a car, could you use public transit ? Can you afford your car? Insurance on your car?
  • Clothing and Accessories, this is an area where there are countless great web sites (e.g. Squawkfox) that can help you control your clothing spending.
  • Food , no I am not saying buy cheap food, but maybe going out for dinner is essential ?
  • Alcohol and games of chance, seriously? If you smoke, stop, and games of chance are not going to get it done either.

Those are a simple overview, I am sure if you looked closely and started tracking things, you’d find many more places to save money.

More Data is a Good Thing

Collect the data, however you like, but with more information comes a better understanding of where you are spending your money.

Neat Infographic From Stats Canada

Spending Infographic

Nifty Infographic

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Energy Up 4.0 % for 2016

Stats Canada on Friday published their year-end Consumer Priced Index. These numbers show us what kind of year 2016 was. The most interesting index increase is Canadians paid 4.0% more for Energy in 2016, and Ontarians had a ludicrous price jump for the price of electricity.

Overall the CPI (or inflation) year over year growth ending in December is 1.5%, which is still below the Bank of Canada’s barometer range (starting at 2.0%). This does not mean the B of C won’t raise interest rates, just that inflation won’t be the reason sited.

The Energy index includes Gasoline, Electricity and other essentials,  and as mentioned. For Ontarians Energy was particularly noticeable as Electricity is up 11.2% year over year ending in December. Yes, that is a double digit increase, so Inflation in Ontario year over year is actually 2.0%.

Prices by Category

By Category we can see the monthly changes in this graphic:

energy up

Transportation is big , note Energy is not mentioned here

Special Aggregate Table

This does show Energy, and you can see how Energy and Gasoline prices are up big year over year.

Relative importance December
2015
December
2016
December 2015 to December 2016
% (2002=100) (2002=100) % change
Special aggregates
All-items excluding energy 92.21 125.0 126.6 1.3
Energy 7.79 143.4 149.1 4.0
Gasoline 3.84 142.7 150.6 5.5
All-items excluding food and energy 75.80 121.3 123.5 1.8
Goods 46.68 116.3 117.4 0.9
Services 53.32 136.8 139.5 2.0

Detailed Highlights

From the CPI detailed report we can get a nice set of highlights about what cost more year over year.

 

Main contributors to the 12-month change in the CPI:

Main upward contributors:

  1. Gasoline (+5.5%)
  2. Homeowners’ replacement cost (+4.3%)
  3. Purchase of passenger vehicles (+2.6%)
  4. Food purchased from restaurants (+2.3%)
  5. Electricity (+3.6%)

Main downward contributors:

  1. Food purchased from stores (-2.8%)
  2. Children’s clothing (-4.5%)
  3. Video equipment (-5.8%)
  4. Travel tours (-1.6%)
  5. Mortgage interest cost (-0.3%)

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Shocking Electricity Price in August (CPI Canada)

The game of numbers, known as the Consumer Price Index from Stats Canada (for August), continue to show an optimistic story on the surface, and a more interesting one underneath the sheets (CPI Canada). (Remember: Lies, Damn Lies and Arithmetic)

The following two lines from the report outline things nicely:

The Consumer Price Index (CPI) rose 1.1% on a year-over-year basis in August, following a 1.3% gain in July.

Excluding gasoline, the CPI Canada was up 1.7% year over year in August, after posting a 1.9% increase in July.

Without gasoline, numbers are still not bad, but then have a look at the data in detail, where you find out that year over year, Electricity rates are up 5.2% (across Canada). In Ontario, I am sure it is even bloody higher!

Main contributors to the 12-month change in the CPI:

Main upward contributors:

  1. Purchase of passenger vehicles (+5.2%)
  2. Homeowners’ replacement cost (+4.0%)
  3. Electricity (+5.6%)
  4. Food purchased from restaurants (+2.5%)
  5. Air transportation (+5.7%)

Main downward contributors:

  1. Gasoline (-11.5%)
  2. Natural gas (-9.9%)
  3. Travel tours (-5.6%)
  4. Telephone services (-1.2%)
  5. Fuel oil (-11.8%)

See, if you look at the numbers close enough, you can really depress the hell out of yourself.

CPI by Category

CPI by Category for Past 12 Months

Bank of Canada’s core index

The Bank of Canada’s core index increased 1.8% year over year in August, following a 2.1% gain in July.

The importance of this, is that while this is still within the Bank of Canada’s “comfort zone” for inflation, interest rate increases may still happen (you just can’t blame it on Inflation (directly)). Also remember, the Governor of the Bank stated, Lower-for-longer interest rates require adjustments, better read what needs to happen to keep rates low (your sphincter might tighten a little).

Inflation in Canada

Bank of Canada Operational Guide for Inflation

Reports from the Past While.

If you want to have a walk down memory lane about how prices have gone up, here you go.

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Zap Electricity Prices Pushes Inflation in June

Stats Canada announced on Friday their monthly CPI report for June 2016, with the following two points (no mention of the zap electricity part of things):

  • The Consumer Price Index (CPI) rose 1.5% in the 12 months to June, matching the gain in May.
  • Excluding gasoline, the CPI was up 1.9% year over year in June, matching the increase in May.

This cursory overview suggests things are as usual in terms of inflation, however, if you read the detailed June Report, (about the Inflation Rate in Canada) you see a few more telling truths (to turn your financial stomach).

I like this part of the detailed report where we find out what major parts of the categories are contributing to higher prices, the electricity zap is quite noticeable.

Main upward contributors:

  1. Purchase of passenger vehicles (+5.6%)
  2. Electricity (+6.9%)
  3. Homeowner’s replacement cost (+3.5%)
  4. Food purchased from restaurants (+2.6%)
  5. Air transportation (+5.1%)

Main downward contributors:

  1. Gasoline (-8.5%)
  2. Natural gas (-12.5%)
  3. Mortgage interest cost (-1.3%)
  4. Fuel oil (-13.2%)
  5. Dairy products (-2.1%)

As usual we see that Fossil Fuels are big downward contributors (although now in Ontario, we will have a Carbon Tax, which will then have the HST on top of it, so that might change here).

zap electricity Inflation in Canada with and without Gasoline

The 12-month change in the Consumer Price Index (CPI) and the CPI excluding gasoline

Bank of Canada’s core index:

The Bank of Canada’s core index increased 2.1% in the 12 months to June, matching the rise in May.

The Bank of Canada has been saying that inflation is “under control” (for now), but my guess is the fragility of the world economy (and Canadian economy) will continue to keep interest rates lower (for now).

Reports from the Past While.

If you want to have a walk down memory lane about how prices have gone up, here you go.

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