Economic data from Canada: Headlines very strong, details questionable – dance on the volcano is increasing, Canadian dollar is appreciating

The Economies and especially the credit and real estate markets in Australia and Canada are not dancing on the volcano – they´re already glowing so hard that you can´t really dance anymore. Nevertheless, the dance on the volcano is still increasing. The Canadian Statistics Agency last week published most recent data on gross domestic product and the labor market.

Q3 GDP was + 1.7% yoy, slightly higher than expected. Household consumption is up 4% (expectations much lower). Consumption growth for the previous quarter has been revised upwards to 5% today. With these two strong growth rates in the second and third quarter, these are the two biggest increases since the financial crisis of 2008. A rogue who thinks bad things now! According to Canadian statistics, growth in private consumption is due to the fact that Canadians have reduced their money reserves even further than they did before. Three more interesting numbers:

Government Investment is up 13% year-on-year, which makes 0.5% of the 1.7% GDP growth.

Exports decline 10.2% yoy!

The labor market data is also impressive. In November alone, 79,500 new jobs were created (expected +10,000). The unemployment rate drops to 5.9% (expected 6.2%). This is the lowest value since 2008!

So at first glance, we have great GDP data and great job market data. But most of all, GDP data shows that they only come about thanks to massive government spending increases and high levels of private consumption, but not because Canada exports more – on the contrary. Thanks to declining exports, less fresh money comes into the country. Anyway. The headline data looks great, the dance on the volcano continues, and everyone is happy. The Canadian dollar is also happy. Compared to the US dollar, he quickly increased vs the US Dollar for the last 3 trading days. US Dollar vs CAD lost from 1,2873 to actually 1,2676.

USD CAD Chart since Nov 27.

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