Since 1985, Mr. Carrick has held the position of Canadian Chief Economist with Reed Construction Data's CanaData, the leading supplier of statistics and forecasting information for the Canadian construction industry.

Construction Industry Forecasts

Notes from Alex Carrick

Alex Carrick
Latest Economic Nuggets: Mid-October 2012
Oct 12, 2012

(1) If it’s all about jobs, then the U.S. is on the right track. In September, the “official” month-to-month increase in employment was 114,000. That figure’s okay, but not outstanding. The better news in the labor market report was the decline in the unemployment rate from 8.1% to 7.8%.

(2) Labor market data is based on two surveys each month, one of payrolls and the other of households. The former has more respondents but the latter is more inclusive (e.g., covering the self-employed as well as wage earners). The “official” jobless rate comes from the household survey. The “official” employment number comes from the payroll survey. However, the household survey also yields an employment number, which in September was a huge +873,000.

(3) Also striking a strong positive note, the latest weekly initial jobless claims figure in the U.S. was the lowest in four years, dating back to September 9, 2009. October 6 2012’s number of 339,000 was a drop of 30,000 from the week before. If maintained throughout the month, it will herald a sharp increase (in the range of +175,000 to +225,000) in the net new number of jobs in October. It will be interesting to see if this has any impact on the Presidential election. The results will be announced on Friday, November 2, just days before the vote.

(4) There are two sectors that traditionally set the tone for the whole economy – housing and autos. In residential markets, almost all the indicators are trending ever so cautiously upwards. Starts, permits and prices are advancing while vacant inventory is falling. In motor vehicles, the performance of sales has been distinctly positive. A return to a 16-million-unit month, seasonally adjusted and annualized, (i.e., the “norm” before the recession) seems not too far away. September’s sales were 14.9 million units, a +13.7% advance year over year.

(5) U.S. home starts have recovered to 750,000 units seasonally adjusted and annualized, about half their “normal” level in most of the years in the 00s. In Canada, the housing sector remains remarkably strong. September’s starts level was 220,000 units which was -2.2% month to month but +4.8% year over year. In 13 of the past 15 months, ground-breakings have exceeded 200,000 units. Most analysts think the appropriate number, based on demographic factors such as family formations, should be about 180,000 units. Ottawa has introduced measures – e.g., reducing the mortgage amortization period – to cool what may be an overheating market and there are indications first-time home-buyer demand is waning.

(6) Canada’s employment gain in September surprised most everyone, +51,000. In the past two months 87,000 new jobs have been created, although July saw a decrease of 31,000. It’s also good that the new jobs in the latest month were mostly full-time. Construction employment rebounded in September, climbing by 29,000 after declining by 44,000 in August.

(7) Spain’s debt has just been downgraded by Standard & Poor’s. The nation’s bonds and notes now carry a rating only one step above “junk” status. Clearly, the Euro zone still has a tough road ahead to resolve the financing issues of its most at-risk member states.

Alex Carrick

Find Canadian construction-related economic articles in Canadian Construction Market News and in the Economic Outlook section of Daily Commercial News.

Alex Carrick Post Archive

10/04 - Auto Sales Set a Blistering Pace in the U.S. and Canada
09/18 - Canada’s Energy Future is Assured, Right? Think Again
09/14 - Latest Economic Nuggets: Mid-September 2012
09/06 - Auto Sector Labor Relations will Play a Role in Construction Outlook
08/30 - Raucous Behavior in the Party Room Next Door
08/13 - Latest Economic Nuggets: Mid-August 2012
07/31 - Canada’s GDP Advanced a Timid 0.1% in May but Support Will Come from Better U.S. Home Prices
07/19 - Finding the Pearls in the Latest U.S. and Canadian Economic News
07/13 - Latest Economic Nuggets: Mid-July 2012
07/04 - U.S. Auto Sales Continue Bullish While Canadian Incomes Languish
06/28 - Three Pivot Points for the World Economy - U.S. Housing, Europe’s Conundrum and Oil Prices
06/14 - Economic Nuggets – June 15, 2012
06/06 - Canada’s First Quarter GDP Growth Met Expectations, But What Comes Next?
05/30 - Ontario has a Backbone of Strength for the Decade Ahead
05/14 - Economic Nuggets - May 15, 2012
05/11 - Canada Rode a Second Consecutive Month of Strong Job Gains in April
05/04 - U.S. Employment Rose by a Mediocre 115,000 in April
04/27 - U.S. GDP +2.2% in Q1 2012 and Alberta led Canadian Provinces in 2011
04/18 - U.S. Inflation Low in March; Canada’s Central Bank Looking to Raise Rates
04/12 - Canada’s Trade Surplus in February Declined but Business is Optimistic
04/03 - A Tale of Two Budgets
03/29 - A strong year for new construction investment intentions in 2012
03/21 - Leading Indicator Series Add to Good News about the U.S. and Canadian Economies
03/06 - Three key trends, more forays into high-tech and the importance for construction
02/29 - Two important sources of strength: share prices and non-residential construction
02/22 - Home resale market may be picking up in the U.S. while flattening in Canada
02/16 - Good news on U.S. housing and employment is positive for Canada as well
02/08 - Home starts and job levels diverge in Canada and the U.S.
02/03 - Canada’s labour market flat in January but U.S. on a roll
01/23 - Canada’s leading indicator series continued to charge ahead in December
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