The jobs & houses edition

Jan. 9: How did the Canadian and U.S. economies fare in November and December?


Happy Friday! Welcome to the end of the week, and what I’m dubbing a special jobs and houses edition, as we get ready for a major slate of numbers on labour and housing starts from November and December for the Canadian economy, and jobs numbers from the U.S.

So far today, we also have a welcome reprieve from starting with a drop in oil prices – they’ve actually been holding fairly steady the last two days, and are just above $49 this morning – but oil prices nonetheless remain the overriding theme. There’s some speculation over whether oil may have finally found a floor, or whether it’s just another “dead cat bounce,” but the price has had a reassuring affect on markets – the TSX/S&P Composite index gained 172.72 points yesterday, and U.S. markets also had general gains.

Your house. Yesterday was the release of the New Housing Price Index from Stats Canada for November, which saw house prices rise by 0.1 per cent. Calgary’s houses are still leading the way, increasing by 0.3 per cent that month alone, followed by Toronto-Oshawa, with the Ontario housing market in Hamilton and London also picking up.
But there are some questions about how Calgary’s housing market held up at the end of the year – the local real estate board said that housing prices were down 7.5 per cent in December from the previous year, and vacancy rates in commercial buildings had also pushed up. A lot has changed since early December, too – on Dec. 9, oil prices were more than $15 higher than they are right now. Today we’ve got numbers out for building permits, which increased by 0.7 per cent from September to October.

Your job. Today we have employment numbers and average hourly wages for December as the monthly labour force survey is released. Unemployment is at 6.6 per cent, after ticking up slightly in November, and the job losses largest in Ontario. However, the overall numbers of workers not much changed from October.

Can U.S. jobs numbers follow up November’s big gains? November’s job report was notably strong, with more than 300,000 jobs added that month, as well as increasing hourly wages. December’s numbers aren’t expected to be as strong, but they will give the final detail for looking at job growth in the states for 2014. With U.S. growth still fairly strong amidst fears of a slowdown in much of the world, the markets are already watching for more signs of a healthy economy. As Businessweek notes, December could be the 11th consecutive month where job growth topped 200,000 – and that hasn’t happened since the mid-’90s.

Will there be deflation in China? A slight detour to discuss China: where the wholesale price index has now fallen for 34 consecutive months – nearly three years. In fact, December’s numbers were the biggest drop in more than two years, raising worries of deflation even as prices for consumer items have risen. But even with a slowdown, the country is lending billions of dollars to cash-strapped oil countries including Venezuela, Russia and Ecuador.

High-priced London homes flew off the market – in the afternoon before a tax increase. You’ve no doubt heard of London’s infamously expensive housing market, where the existence of £6 million flats is not just urban legend but actual fact. In the U.K., the average house price is about £180,000 (just under $340,000 Canadian), while the average house in London is about twice that.
Last month, during the U.K.’s autumn statement the government announced a new tax on high-priced homes – anything over around £940,000 – to take effect at midnight. What resulted was a madcap housing buy-up. The FT reports one in six of all the homes in London’s priciest neighbourhoods – places like Chelsea and Belgravia – were bought or sold on that day alone, with tax savings of £9.4 million for getting the deal done before the change took effect.

Need to know: 
TSX: 14,457.72 (+172.72 points, 1.21 per cent), Thursday
Oil (WTI): 49.02, Friday morning
Loonie: 84.49 cents, Thursday


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