Canadian Economic News

[jdobbin]

http://www.ctv.ca/servlet/ArticleNews/stor...?hub=TopStories

A new study says Canadians have been slow to change their driving habits, in spite of higher gasoline prices.

Statistics Canada reports Canadians drove their vehicles 332 billion kilometres last year; that's 5.2 per cent more than in 2002.

The number of vehicles on the road also rose 9.4 per cent in six years and the agency reports that new motor vehicle sales in the first five months of this year have continued at a record pace.

The retail sales volume of gasoline rose 7.2 per cent from 2002 through 2007.

Another sign that driving habits have changed little: demand for urban transit has barely kept pace with population growth since 2002.

It looks like changes in driving habits have not been affected in part because of a steady increase in incomes.

[blueblood]

http://www.ctv.ca/servlet/ArticleNews/stor...?hub=TopStories

It looks like changes in driving habits have not been affected in part because of a steady increase in incomes.

There is a change, the price of a 1/2 ton in the auto trader is evidence for me. Also driving around Winnipeg there is less and less trucks around.

[jdobbin]

There is a change, the price of a 1/2 ton in the auto trader is evidence for me. Also driving around Winnipeg there is less and less trucks around.

The changes in prices is in part due to the auto manufacturers getting out of leasing. It cut the value of many vehicles in the re-sale market, many of which are trucks.

As far as anecdotally not seeing as many trucks on the streets of Winnipeg, I haven't seen it yet.

[msj]

The changes in prices is in part due to the auto manufacturers getting out of leasing. It cut the value of many vehicles in the re-sale market, many of which are trucks.

As far as anecdotally not seeing as many trucks on the streets of Winnipeg, I haven't seen it yet.

Chrysler and Ford have got out of leasing because the residual value of vehicles (generally trucks) has fallen to the point that it is not profitable to lease vehicles.

The current problem is taking on a large amount of inventory as vehicles go off-lease which, of course, puts further downward pressure on prices.

The decision for the lessee is simple - pay the contracted residual price which was determined 4 years ago to be, say, $20,000, for a vehicle that the market today is valuing at, say, $15,000, or walk away.

Walking away is the rational thing to do.

So, the rational thing for the companies to do is to stop leasing.

After all, in order to lease a new vehicle under current market conditions, the lessor now has to use a lower residual value which automatically bumps up the monthly lease payment and, therefore, makes leasing even less attractive as compared to buying a vehicle.

Edited August 15, 2008 by msj

[jdobbin]

http://ca.news.yahoo.com/s/capress/080821/business/inflation

Statistics Canada says the annual inflation rate rose to 3.4 per cent in July from 3.1 per cent in June.

With gasoline out of the mix, consumer prices rose 2.1 per cent in July. The Bank of Canada's core inflation rate, which ignores the most volatile items, such as food and energy prices and also factors out changes in indirect taxes, rose 1.5 per cent in July.

A little better result than some nations are seeing for inflation.

Still, with the dollar dropping from parity, we are going to see inflation for a bit.

The one good piece of news is that exports might be helped with a lower dollar.

[jdobbin]

And once again the Conference Board lowers the expectations for growth dramatically.

http://www.reuters.com/article/usDollarRpt...352233820081103

The independent research association now expects gross domestic product to come in at 0.7 percent this year, and at 1.5 percent in 2009. That compares to an earlier forecast, released Oct. 15, of 0.8 percent growth in 2008, followed by 2.2 percent next year.

[blueblood]

And once again the Conference Board lowers the expectations for growth dramatically.

http://www.reuters.com/article/usDollarRpt...352233820081103

Would you rather those numbers be in integers?

[Smallc]

And once again the Conference Board lowers the expectations for growth dramatically.

http://www.reuters.com/article/usDollarRpt...352233820081103

We're still in relatively good shape. We'll pull through this one in a lot better shape than many.

[jdobbin]

Would you rather those numbers be in integers?

When the Conference Board drops expectations a half percent or more it means a lot of hardship on an already tough economy.

[jdobbin]

We're still in relatively good shape. We'll pull through this one in a lot better shape than many.

Since we see the forecast lowered each 30 days, I don't know how long the sunny optimism can last.

[blueblood]

And once again the Conference Board lowers the expectations for growth dramatically.

http://www.reuters.com/article/usDollarRpt...352233820081103

I posted on Earlier threads the conference board figured growth was going to be 0.6% in 2009, then up more in 2010.

[jdobbin]

I posted on Earlier threads the conference board figured growth was going to be 0.6% in 2009, then up more in 2010.

And 30 days later they have reduced those numbers.

[Smallc]

Since we see the forecast lowered each 30 days, I don't know how long the sunny optimism can last.

Sunny optimism is the best possible thing to have in this situation. If the people lose all confidence, that will create a real problem. We are still going to come through this better than most.

[jdobbin]

Sunny optimism is the best possible thing to have in this situation. If the people lose all confidence, that will create a real problem. We are still going to come through this better than most.

I think some realism is needed. For the sake of the budget I hope that Harper is not basing anymore of his ridiculous spending on optimism.

[Smallc]

I think some realism is needed. For the sake of the budget I hope that Harper is not basing anymore of his ridiculous spending on optimism.

Well that's a different case. We do need to realize though, that even though there are tough times ahead we are well positioned because of the financial management that we've had over the last decade. Canada will come through this.

The government says that it is keeping a close eye on things but that they will not engineer a surplus. In other words we may be headed into deficit. I don't like that prospect, but I like even less the prospect of a large reduction in spending leading to further problems with this situation.

[jdobbin]

Well that's a different case. We do need to realize though, that even though there are tough times ahead we are well positioned because of the financial management that we've had over the last decade. Canada will come through this.

Not if Harper continues to engineer a deficit by spending more than he promises every budget.

[Smallc]

Not if Harper continues to engineer a deficit by spending more than he promises every budget.

I'm not really sure what is the right answer to our current predicament and I can't really say whether Stephen Harper has been right or wrong in the direction that he has taken the country. For the time, I will trust that he was right, hope that he was right.

We may need a deficit to propel our economy through this. Cutting spending now may be the most harmful thing possible. By going into deficit though, we will destroy part of the work that has been done in order to erase the debt, and erasing the debt is something that I'm a very big proponent of.

[Mr.Canada]

Our PM has shown great vision and strong leadership in these difficult times. It's time to rally behind our leader as he guides us out of the rough water and into another period of economic growth. It's going to take a lot of effort and there is much work to do. The sooner we stop bickering the sooner we can really get behind our PM who happens to be an economist and a man with a brilliant vision for Canada and its bright future. Together, we can do it!

[jdobbin]

House prices in Ontario have gone down dramatically.

http://canadianpress.google.com/article/AL...m4c5D1YuCcI8QfQ

The number of resale home deals fell 35 per cent in the Greater Toronto Area last month compared with a year earlier, according to a tally by the Toronto Real Estate Board.

And the average price was down 10.6 per cent, to $352,974 from $394,646.

The realtors' group tracked a 13 per cent price decline in the central city to $376,896 and an eight per cent pullback in the suburban 905 area to $336,049.

That is still a lot of money to buy a house.

[BC_chick]

That is still a lot of money to buy a house.

Oh God, how differently we look at the same figures... I paid that much for my 2br condo. Rundown shacks around here are still half a mil plus....

[blueblood]

Oh God, how differently we look at the same figures... I paid that much for my 2br condo. Rundown shacks around here are still half a mil plus....

And that much will buy a very nice house in rural canada and you'll still have money in your pocket. And then there's the houses in Lynn Lake...

[jdobbin]

Oh God, how differently we look at the same figures... I paid that much for my 2br condo. Rundown shacks around here are still half a mil plus....

Houses that went up 10% a month were a bubble just waiting to burst.

It is no wonder why some young people are having a hard time finding places to live where there are no rental units and houses sell for $500,000 plus.

[jdobbin]

In other news that will affect Canada, oil has dropped to $60 a barrel.

http://www.ctv.ca/servlet/ArticleNews/stor...81106?hub=World

Oil prices neared US$60 a barrel Thursday, the lowest point in about a year and a half, as a growing number of economic reports point to a long and painful recession.

The number of Americans continuing to draw unemployment benefits surged to a 25-year high, the Labor Department said Thursday, and nation's retailers saw their sales plummet last month to the weakest October level since at least 1969.

[jdobbin]

The jobs report has come out.

It defies predictions but I wondered just how much economic stimulus an election had and now I think we know the answer.

http://www.ctv.ca/servlet/ArticleNews/stor...ada&s_name=

Canada's economy defied expectations in October, adding 9,500 jobs, but economists note the boost was largely supported by election-related hiring.

According to a Statistics Canada report released Friday, Canada's jobless rate edged up from September's 6.1 per cent to 6.2 per cent in October.

The jump was driven by an increase in the number of people looking for work, said researchers.

While there was an overall employment gain of 9,500 workers, it was largely the result of the temporary hire of 40,000 public-sector administrative workers -- mostly needed for the fall federal election.

Public sector worker. Eek.

And now they are out of work following the election.

[jdobbin]

Global Insight predicts 100,000 jobs lost.

http://ca.news.yahoo.com/s/capress/081111/national/economy

The next few months will "feel like a recession" because more Canadians are going to start losing their jobs - predicting 100,000 net job loss during the first three quarters of 2009.

"That's still a mild recession," he said, "because we have just two negative quarters of growth and labour markets are still holding up relatively well. We have the unemployment rate ending the year at 7.2 per cent, which for Canada historically is not that bad."

Still, Orr says Canada's economy will record zero growth for the entire 2009.

I expect some places like Ontario and Quebec will be hit the hardest.