Key Economic Indicators

Unemployment Rate

The unemployment rate represents the number of unemployed persons expressed as a percentage of the labour force. The unemployment rate for a particular age-sex group is the number unemployed in that group expressed as a percentage of the labour force for that group.

Inflation Rate

The average rate of increase in prices. When economists speak of inflation as an economic problem, they generally mean a persistent increase in the general price level over a period of time, resulting in a decline in a currency’s purchasing power. Inflation is often measured as a percentage increase in the consumer price index (CPI). Canada’s inflation policy, as set out by the federal government and the Bank of Canada, aims to keep inflation within a target range of 1 to 3 per cent. If the rate of inflation is 10 per cent a year, $100 worth of purchases last year will, on average, cost $110 this year. At the same inflation rate, those purchases will cost $121 next year, and so on.

Real Gross Domestic Product (GDP)

The total value of all goods and services produced within Canada during a given year. It is a measure of the income generated by production within Canada. GDP is also referred to as economic output . To avoid counting the same output more than once, GDP includes only final goods and services - not those that are used to make another product. GDP would not include the wheat used to make bread, but would include the bread itself.

Exports

The value of goods and services sold by Canada to other countries.

Imports

The value of goods and services purchased from other countries by Canada.

Exchange Rate

The price of one national currency in terms of another. The price of a currency depends on supply and demand, which are affected by many factors including interest rate differentials, relative inflation, export competitiveness, economic growth, deficits and debt.

Prime Interest Rate

The interest rate that commercial banks charge their prime or most credit worthy customers, generally large corporations.

S&P/TSK Composite Index

The S&P/TSX Composite Index is maintained by Standard and Poor's and the Toronto Stock Exchange and is regarded as a good general indicator of stock price movements for Canada. This index replaced the TSE 300 Composite Index effective May 1, 2002 although initially its constituents and the index calculation method were exactly the same as before. After May 1, with quarterly revisions, companies that do not meet size and liquidity requirements are dropped from the index while newly qualifying ones are brought in.

Federal Debt

The accumulated total of all past federal deficits and surpluses since Confederation. The net federal debt is the gross federal debt minus the federal government’s financial assets such as loans, investments and foreign exchange accounts.

Retail Sales

Each month, Statistics Canada gathers monthly sales estimates from a sample of Canadian retailers for the Monthly Retail Trade Survey. The resulting total retail sales statistics are a key monthly indicator of consumer purchasing patterns: they are used by Statistics Canada, in combination with other data, to calculate gross domestic product and by governments to make decisions related to the economy, and by the private sector to chart the direction of the economy and decide how to navigate within it.

Housing Starts

Housing starts are a count of the number of new residential units on which construction commenced within a particular month. Only new self-contained dwellings that are to be occupied year-round are counted in the Canada Mortgage and Housing Corporation’s Starts and Completions Survey (for example, hotels and summer cottages are excluded).

Composite leading Indicator

The leading indicator is a composite, or weighted average, of 10 component time series specifically chosen to track emerging changes in the direction of key sectors of the economy. They turn before the economy does, often because they capture changes in the volume of work early in the production process. For example, ground-breaking on a new housing start precedes most of the actual building of the house, while most factories do not start production until receiving a new order. By combining these key indicators for household spending, manufacturing, exports and financial markets, the overall composite index provides an early indication about impending changes in the course of the economy.

Present Economy

The following information is from “Canadian Economy On-line.” For the latest updates visit their Link at:

http://canadianeconomy.gc.ca/english/economy/index.cfm#top

Population 1st quarter 2006	32,422,91
Unemployment rate April 2006	6.4%
Inflation rate April 2006	2.4%
Real GDP March 2006, % change	0.1%
Exports 1st quarter 2006, % change	-0.2%
Imports 1st quarter 2006, % change	-0.4%
Exchange rate May 2006 - $CAN buys US$	0.9013
Prime interest rate May 2006	6.00%
S&P/TSX Composite Index April 2006 (1975=1000)	12,204.17
Federal debt 2005 - $ millions	499,863.0
Retail sales March 2006 , % change	1.5%
Housing starts April 2006,thousands	217.9
Composite leading indicator April 2006, % change	0.5%