Summertime Charts
by JDH on August 5, 2023
Let’s review some charts. First, a long term view of the Canadian Labour Force Participation Rate:
As you can see, since peaking in 2003, the trend is down. Let’s zoom in:
As you can see, the trend is accelerating. The Labour Force participation rate is now 65.6%, which is higher than the 60% level reached at the depths of the lockdowns but low compared to historical norms.
As a result, last month, unemployment increased to 5.5%. That’s the third consecutive monthly increase, and it’s now at its highest level since January 2022.
A deeper dive shows that unemployment is increasing in the construction sector, which is not surprising given the surge in interest rates over the last year.
Do these numbers indicate a booming economy?
I don’t think so, but we shall see.
One final point: the Canadian government bond 5 year yield is at it’s highest level since 2008. Remember what happened in 2008? And remember that it is 5 year bond rates that directly influence mortgage rates?
Not a pretty picture indeed.
Summertime Charts
by JDH on August 5, 2023
Let’s review some charts. First, a long term view of the Canadian Labour Force Participation Rate:
As you can see, since peaking in 2003, the trend is down. Let’s zoom in:
As you can see, the trend is accelerating. The Labour Force participation rate is now 65.6%, which is higher than the 60% level reached at the depths of the lockdowns but low compared to historical norms.
As a result, last month, unemployment increased to 5.5%. That’s the third consecutive monthly increase, and it’s now at its highest level since January 2022.
A deeper dive shows that unemployment is increasing in the construction sector, which is not surprising given the surge in interest rates over the last year.
Do these numbers indicate a booming economy?
I don’t think so, but we shall see.
One final point: the Canadian government bond 5 year yield is at it’s highest level since 2008. Remember what happened in 2008? And remember that it is 5 year bond rates that directly influence mortgage rates?
Not a pretty picture indeed.