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The composite index rose by 0.2% in January, after December was revised up to no change from November. The upturn was broadly based, with 5 of the 10 components rising, versus only 2 in December. Household spending remained the strongest sector of the economy, more than offsetting the sharp drop in the stock market at the start of 2008.
December's sharp decline in the housing index moderated substantially in January. Housing starts returned to more normal levels after severe storms helped depress them in December. The underlying strength of the housing market was reflected in a 1.1% gain in furniture and appliance sales, their most since July 2006. Demand for other durable goods began to firm even before the goods and services tax was cut on January 1, after which auto sales in January posted one of their largest increases on record. The rebound of consumer demand in the new year was also reflected in a recovery in employment in personal services, which led the turnaround in overall service jobs in January.
The Toronto stock market fell sharply in January, echoing the slide felt in markets around the world.
The outlook for manufacturing industries remained mixed. The leading indicator for the United States continued to fall slowly in response to weakness in housing and autos. However, new orders for goods manufactured in Canada jumped 3.1%, driven by ongoing strength in capital goods, especially aerospace. Meanwhile, inventories remained well under control, helping raise the ratio of shipments to inventories.
Available on CANSIM: table 377-0003.
Definitions, data sources and methods: survey number 1601.
This release will be reprinted in the March 2008 issue of Canadian Economic Observer. For more information on the economy in January, consult the February 2008 issue of Canadian Economic Observer, Vol. 21, no. 2 (11-010-XWB, free).
For more information, or to enquire about the concepts, methods or data quality of this release, contact Philip Cross (613-951-9162; ceo@statcan.gc.ca), Current Economic Analysis Group.
Table(s).
