Monday, November 7, 2011

Employment & New Permits

It was a slow week, I was also away on "important business" (read golf) at the end of last week so I didn't pay attention to the data.  Two numbers came out on Thursday:  Employment -54k and new building permits -4.9%.  Both numbers were worse than expected (although why anyone pays attention to building permit is beyond me).

First, employment while the street was "expecting" about +15k and got -54k instead.  This is not the end of the world, for some time the Canadian economy has been slowing -- its no coincidence that despite very good Q3 GDP performance, 100% of that quarter's growth was generated by the oil & gas sector.  The strengthening CAD will impact the rest of the economy.  The question is was this an outlier or part of new trend (Job creation has been positive in Canada over the past 3 years...)

The second data point is the construction permits, that were down -- the problem with this figure is monthly variance is dramatic, a +5% shift can be followed by a -5% figure the next month. The overall trend remains positive.  

On another note ECRI continues to signify that a recession is baked in the American cake.  Their accuracy is legendary.  Also the news out of China is getting more and more challenging everyday.  The latest stories about the informal banking system in a a state of near collapse is instructive, because it demonstrates that the Chinese banking system has one goal to channel the savings of ordinary Chinese to state owned enterprises (SOEs), the rest of the "Capitalist" economy is left to rot.  

This is certain to end well!


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