Phil Smith

Yes, Jamie.

Here is an update to my compact set of 100 Canadian macroeconomic indicator charts. www.philipsmith.ca/Canadian_mac...

Looking in on what's been happening to consumer and business insolvencies in Canada as of December, the former continues to trend up and the latter down. #cdnecon

I had not noticed until now, but according to LFS, total labour compensation decreased marginally in January, on a seasonally adjusted basis. Monthly volatility must be recognized, certainly, but this was an unusually big December-to-January change and it may portend a major economic downturn.

According to Rentals.ca, the average asking rent in Canada was down 2.0% in January compared to a year earlier, continuing the decline that has been evident since October 2024. The December-to-January movement, however, suggests the decline may be coming to an end. #cdnecon

December new motor vehicle sales data for Canada, released by StatCan today, indicate dealer revenues are continuing to trend down, as are the number of units sold. They peaked in March 2025. #cdnecon

StatCan released monthly building permits statistics for December 2025 today. The data are extremely volatile, but appear to show residential construction trending down and non-residential construction activity fairly flat. #cdnecon

This chart shows average weekly hours worked by employees. The total for all industries decreased by 8.2% over the period, or an average of 0.2% a year. This is partly substitution of part-time for full-time employment. The downward trend is present in almost all industries.

Canada's LFS measures the number of hours employees work in their main job. The 2nd chart shows shares of total hours worked by industry from 1987 to 2025. Notable is the steady decline of the goods-sector, especially manufacturing, though construction has trended up. Services are a mixed picture.

Finally, at times the mortgage rate is seen as a major contributor to misery. So here is one more version that simply adds the 1-year conventional mortgage rate to the first of the three misery indexes. The mortgage rate, being larger, tends to dominate over the other two components.

Today it seems that food price inflation is causing much more misery than general inflation, so here is a second version that substitutes the former for the latter. Misery is more volatile here and is clearly on the rise in 2025. It had bottomed out in early 2017.

2/ Nevertheless it is simple, easily understood and fun, if you don't take it too seriously. Here is Canada's misery index. Misery is low compared to 2020-2023, but higher than in the post-recession years of 2012-2019.

1/ A half-century ago Arthur Okun, an American economist, invented the 'misery index' as the sum of the unemployment rate and the inflation rate. It is a very crude measure of general economic misery, to be sure, and it can be roundly criticized from many angles.

Canadian LFS employment rate, participation rate and unemployment rate, 1921 to 2025. #cdnecon

Canadian LFS key variables, annual per cent change, 1922 to 2025. #cdnecon

Canadian LFS key variables, 1921 to 2025. #cdnecon

Total hours worked in Canada's economy stopped growing in January, according to LFS. The 12-month growth rate of hours worked had been on a steady decline since the post-pandemic resurgence. For details on today's LFS release for the month see my LFS browser: philipmsmith.shinyapps.io/LFStables/

1 - UR = 1 - U/LF = (LF-U)/LF = E/LF where U is people looking and no job, LF is people looking and no job plus people with jobs, E is people with job, PR=LF/LFPOP, DS = LFPOP/POP where LFPOP is the working age population, POP is the total population. I will be interested too in Japan's case.

Thanks Karl. That's kind.

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Here's the way objective reporters in the U.S. assess the results of the Conservatives' leadership vote on Friday.

Statistics Canada reported today that SEPH employment decreased slightly in November. SEPH has been showing a lot less employment growth for the last three years than LFS, probably due to the effect of the swings in the non-permanent resident population within LFS methodology. #cdnecon

And here is what world commodity prices look like with a 53-year perspective. #cdnecon

The strength of Canada's economy is highly dependent on world commodity prices. Entering 2026 it continues to benefit from high prices of metals and minerals and relatively good prices for agricultural and fish products, but energy and forestry prices are somewhat in the doldrums. #cdnecon

2025 was a year of continued surging in the labour force population and rapid growth in employment, according to Canada's LFS. Nevertheless unemployment rose as the labour force also expanded a lot. SEPH, though not yet complete for the full year, showed a weaker employment picture. #cdnecon

Government of Canada fiscal numbers since Confederation Viewing current budget plans in a long-term context

I released a paper on substack this morning casting the fiscal numbers from Canada's November 4 budget in a long-term historical context. #cdnecon

philip635.substack.com/p/government...

2/2 The capital consumption allowance shares are similar in the two countries. The share of indirect taxes, such as the Harmonized Sales Tax, remains a lot higher in Canada although the Trump tariffs have boosted the US share quite noticeably so far in 2025.