On Friday, Statistics Canada released its third-quarter economic report, which included an update on gross domestic product and job growth. With the Canadian government boasting a strong economy and North American Free Trade Agreement (NAFTA) negotiations in an arguably precarious situation, many experts are watching the domestic economic climate very closely.
Some of the highlights from Friday’s data:
- Nearly 80,000 jobs were created in Nov 2018 (far above the 10,000 expected by economists, according to Reuters)
- Unemployment reached its lowest level since February 2008, at 5.9 percent.
- Wages were also up.
- Exports were down in Q3, creating drag on GDP.
- The real gross domestic product grew at an annualized pace of 1.7 percent in the quarter — analysts expected 1.6 percent, and the Bank of Canada expected 1.8 percent.
On Friday, Dec 1, Farm Credit Canada, chief economist, JP Gervais joined RealAg Radio to discuss the Canadian economic results. (Hear that interview with JP Gervais here, starting at the 39:30 min mark.)
The big question for Gervais and other economists is ‘how does all of this impact the Canadian dollar and interest rates in 2018?’
In regards to what would convince Gervais that the economy is on the correct path, Gervais said, “If you look at the job numbers for the year, the full time job number is doing well. If we start to see business investment growth increase, that would be a great indication we are on the path of strong economic growth and possibly higher interest rates.”
With Canada looking to diversify its trade in the European Union and Asia, while securing NAFTA, bringing the GDP up through export expansion will be a focus in the fourth quarter and into 2018.