Jobs
This Week’s Top Stories: Canadian Unemployment Hits 7 Year High, & Toronto Home Prices Rise – Better Dwelling
Time for your cheat sheet on this week’s top stories.
Canadian Real Estate
Canadian Unemployment Hits Highest Non-Pandemic Rate Since 2017
Canada is adding jobs at one of the fastest paces on record, but adding even more people. Despite adding 51k jobs in November, the unemployment rate made a sharp uptick of 0.3 points to 6.8% over the same period. Statistics Canada noted the unemployment rate is now at the highest non-pandemic rate since 2017. The issue is even more complicated as over 1 in 5 of those unemployed are now considered long-term unemployed (27+ weeks). This indicates the surge of immigration to address the skills gap didn’t close it—it widened the labor mismatch.
Canadian Labor Productivity Falls Further, Stagnant For Nearly Half A Decade
Canada’s latest GDP data provided further evidence of a worsening labor productivity crisis. The national labor productivity index fell 0.4% in Q3 2024, marking the third and largest consecutive drop this year. The streak was only broken up by a single uptick, and just 1 in 5 quarters since 2020 showed growth. Despite a massive surge in population, the country’s output remains relatively stagnant—it’s back to 2019-levels. Even the Bank of Canada has been warning the country is in crisis, with the low levels leading to an erosion in quality of life, higher tax rates, and making it difficult to attract global capital for productive investments.
Toronto Real Estate Prices Rise Despite Unusually High Inventory
FOMO or a recovery? Greater Toronto real estate prices made a minor climb of 0.1% (+$1,400) to $1,061,700 in November—the first increase in months. Behind the improved sentiment was a 40% increase in home sales compared to last year, on the heels of aggressive rate cuts from the central bank. However, it’s worth noting that even with this improvement sales remain at one of the weakest levels on record for the month. On the other side of that equation is soaring inventory, the highest level in over 10 years.
Canadian GDP Revisions Re-Write Pandemic, All Sectors Recovered: BMO
One of Canada’s largest banks warns investors that GDP revisions are re-writing the pandemic. BMO notes that the recent revisions in GDP show that the country saw a much smaller impact from pandemic-era measures, and all industries have recovered. The bank expressed some skepticism, mentioning this fails to reflect the observed data in other areas. However, the official data can have a big impact, as it eliminates the output gap the central bank used to reinforce rate cuts.
Canadian Per-Capita GDP Falls For A 6th Quarter, Supersized Cut Expected: RBC
Canada’s biggest bank sees another supersized rate cut coming next week. RBC Economics confirmed its expectations of a 0.5 point cut to the overnight rate after per-capita GDP fell for a 6th consecutive quarter. This is quickly becoming the market consensus despite the re-acceleration of inflation and a shrinking productivity gap—two of the only real factors that should be considered. Unemployment and GDP aren’t technically supposed to impact the Bank of Canada’s decision, but we’ve all noticed the influence of political pressure on the central bank.