Canadian Economy and Unemployment Rate

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After an unexpected half-point contraction in the second quarter, the Canadian economy expanded better than expected by 3.5 percent in the third quarter. The U. S. economy expanded by 2 percent in the same period. Increased demand for exports was behind this unexpected growth. Although the economy is expected to grow in a positive pace in the last quarter of 2011, it may not be as robust as the 3rd quarter.

Consumer spending on goods and services rose in the 3rd quarter by 0.3 percent, lower than 0.5 percent of the 2nd quarter. Government spending on goods and services rose in the 3rd quarter by 0.2 percent. Growth was seen in the goods producing industries and service industries by 1.4 and .6 percent. Energy, manufacturing, construction, transportation, and wholesale trade are where growth occurred most.

Canada’s unemployment rate rose to 7.4 percent in November, making it the fifth consecutive month since June in which there was no new job creation. In the U. S. 120,000 jobs were created for the same month. However, the overall pace of job creation in Canada is still higher than the U. S. since the recession. With 13.2 percent unemployment rate, Newfoundland and Labrador has the highest unemployment rate. Conversely, Alberta has the lowest unemployment rate at 5.0 percent.

Bank of Canada states that economic activity will be sluggish in the last quarter of 2011 and the early months of 2012 with a possibility of conditions getting worse if the European debt crisis continues to drag down the global financial situation. However, the Canadian government will remain flexible with its economic policies and will intervene with new stimulus packages if necessary.

Data Source: Statistics Canada

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This entry was posted on Saturday, December 10th, 2011 at 7:59 pm and is filed under Canada and Economy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.