FEATURED ARTICLE: CSIT Portfolio Update? MARKET STATISTICS: Weekly Change
ECONOMIC STATISTICS:
WEEKLY ECONOMIC REPORT
FEBRUARY 9, 2015
Ronald Chow, Chief Economist ! ronaldchow@crescentschool.org
GOOD NEWS FOR CANADIAN JOBS! Canadian Employment Report – January Overall, employment rose by 35,400 in January, compared with consensus expectations of a modest 5,000. This also looks favourable in comparison to average declines of 13,800 in the two prior months. Details of the release were a little less impressive, as all the gains were in part-time jobs (full-time jobs fell 11,800). As well, all of the growth was in selfemployment, as private sector payrolls only nudged up 1,100 and public sector payrolls fell 6,700. The gains were, however, good enough to bring the unemployment rate down a tick to 6.6%, matching its cycle-low. Total hours worked managed to edge up 0.1%; even average hourly wages were okay, rising to a 2.0% y/y clip – doesn’t sound great, but is above current inflation of 1.5%. It isn’t difficult to dig below the shiny surface of Canadian jobs data to reveal the dull underlying story. Still though, the report is a breath of fresh air for an economy that felt like it was fighting a bad cold recently.
AMERICAN COMPANIES GO ON A HIRING BINGE! U.S. Employment Report – January South of the border, the American companies went crazy as nonfarm payrolls rose a stronger-than-expected 257,000 in January, following-up the upwardly-revised gains of 329,000 in December and 423,000 in November. The three-month average of 336,000 is an amazing show of confidence, suggesting that companies believe that cheaper fuel will propel the expansion forward despite the strong dollar. Job growth continues to be widespread across industries, with services, manufacturing and construction all posting solid gains, though government pulled back after a spate of hiring. An upward turn in the participation rate drew more than one million people into the labour force, lifting the unemployment a notch to 5.7% - it’s still down nearly one percentage point in the past year and is sitting at near six-year lows. Average hourly earnings jumped 0.5%. Average weekly work hours rose 0.2% and stands 2.1% annualized above the Q4 average. Assuming some rebound in productivity, GDP growth should hold above 2% in the first quarter. The jobs report will relieve some of the anxiety about the expansion’s momentum in the wake of recent softer data. More jobs were created last year (3.116 million) than at any time since the tech boom of 1999. WEEKLY ECONOMIC REPORT
FEBRUARY 9, 2015
Ronald Chow, Chief Economist ! ronaldchow@crescentschool.org
U.S. TRADE DEFICIT WIDENED! U.S. Goods and Services Trade Balance – December The U.S. goods & services trade deficit surprisingly widened in December, the first deterioration seen since September, and at $46.6 billion, is the widest in two years. The strong current and sluggish growth overseas reflected in a 2nd drop in the row for exports. Meanwhile, imports jumped 2.2% - much of this was auto-related. The petroleum trade deficit also widened to $14.7 billion at year-end, in both nominal and real-terms. All in, this is not good news for the final measure of economic growth. In real-terms, the goods & services trade deficit widened sharply (a near 7-year high). This report suggests a downward revision to fourth quarter GDP growth.
CSIT PORTFOLIO UPDATE? Interesting chart?...
Did you check your email yesterday morning, on Sunday, February 8, 2015?.. We have a new publication! The Update will appear biweekly (every two weeks), and will update you on all of our current investments. It will measure our portfolio performance against our benchmark, and will include some important statistics you should know about our portfolio.
THE WEEK AHEAD Canadian Housing Starts - Monday, February 9, 2015 at 8:15am
United States Wholesale Trade - December - Tuesday, February 10, 2015 at 10:00am
United States Retail Sales – January - Thursday, February 12, 2015 at 8:30am
United States Business Inventories – Dec. - Thursday, February 12, 2015 at 10:00am
Canadian Manufacturing Sales & Orders – December Canadian New Motor Vehicle Sales – Dec. - Friday, February 13, 2015 at 8:30am - Friday, February 13, 2015 at 8:30am
UPCOMING CSIT MEETINGS Monday, February 9, 2015 at 1:30pm - Sector Meetings WEEKLY ECONOMIC REPORT
FEBRUARY 9, 2015
Ronald Chow, Chief Economist ! ronaldchow@crescentschool.org