Statistics Canada will issue a correction to last week’s jobs numbers on Friday. The agency reported that we added 200 positions in July, a mere 1% of the employment growth economists predicted. The number of part-time jobs rose 60,000 while full-time employment dropped 59,700, according to the original report.
Let’s hope Friday brings a revision upwards. We could use a bit of good news.
Last week also saw the release of a new consumer confidence report from The Conference Board of Canada. It does not bode well for consumer spending. July’s index result of 85.9 marks the third consecutive month-over-month decline.
“Obviously that’s a disappointing result,” said Todd Crawford, a senior economist with The Conference Board of Canada and author of the report. “We’re higher than we were during the recession. But we haven’t really seen a sustained recovery for some of the regions in the country.”
The July results tell a quick, concise story of the state of the nation. Atlantic Canada is least confident, posting a score of just 72.9. Provinces hit hard by the downturn in manufacturing – Ontario and Quebec – continue to struggle with a July result of 74.9 and 80.5 respectively. In the west, where Canadians have benefited from a relatively healthy global commodities market, the Prairies scored 107.8 and B.C. scored 105.9.
Consumer opinions matter because they’re considered a leading economic indicator. “We see a distinct link between the level of consumer confidence today and the rate of consumer spending about four to six quarters down the road,” Crawford told me. “If people are not feeling confident, they’re not going to go out and buy things like houses and cars. And if they’re not spending, we’re getting a lot less economic growth.”
A couple of other key findings:
- About a quarter (25.5%) of Canadians believe they’ll be better off financially six months from now. That’s down from 26.4% last month. It’s the second monthly dip in a row.
- Just 15.9% believe the job market will improve in six months. A bigger number - 22.7% - believe it will worsen.
- Fewer than half (44.2%) say this is a good time to make a major purchase. Almost as many - 39.4% - say it’s a bad time.
To put that last result into context, I asked Crawford how the numbers compare to the period immediately before the last recession. “In 2007, more than 50% of people thought it was a good time to make a major purchase,” he said. The result ranged between 52% and 55% during that year. Meanwhile, about a third believed it was a bad time.
After all this time, the number of Canadians optimistic enough to make a major purchase is still six percentage points lower than it was pre-downturn. Did those folks move into the undecided camp? No. The percentage that think major purchases are unwise is up by practically the same amount. “There has been a significant swing there,” said Crawford.
Question is, how long before it swings back?