Ontario Third Quarter GDP Grows 0.9% or 3.5% Annualized, Underlying Numbers Weak

I hadn't got around to writing about the Ontario third quarter GDP growth number which at 3.6% was a very good number for today's Ontario. Though to be fair that is a single quarter. On the Ontario Finance Ministry third quarter economic accounts page, the second quarter number is now listed at 1.7% annualized, up 1.4% from when the second quarter numbers were released.

Curiously, when the second quarter numbers were released by the ministry, the first quarter number was revised up to 0% versus the chart now released for the third quarter that shows the first quarter growth as now being slightly positive (eyeballing it, I would say 0.7% annualized). The Ontario 2015-2016 budget predicted 2.7% GDP growth which could be possible with a decent fourth quarter, but I'm betting the third is a bit of an anomaly.

From the US BEA results for US GDP released on January 29, "In the third quarter, real GDP increased 2.0 percent". Statscan reported third quarter growth of 2.3%, so Ontario had significantly better performance for both.

From the economic accounts page, "Exports advanced 3.0%, the strongest quarterly gain since 2013.  Imports edged down 0.1% in the quarter." I'm wondering how that compares in terms of items and individual services versus the dollar values.

More negative is that "Capital spending on machinery and equipment decreased 0.6%, the third consecutive quarterly decline" which certainly isn't good for future productivity growth.

Inventory numbers were also negative "Non-farm inventory accumulation slowed as businesses added $1.4 billion ($2007) worth of goods to inventories, down from $5.5 billion in the second quarter.  The third quarter inventory buildup occurred in the manufacturing and retail sectors, while wholesale inventories declined" Those inventories have to be unwound some time, so when it happens, it would be pretty.

Obviously the 3.5% number for the third quarter was impressive, although digging down, one wonders if it was really just currency effects. Significant future productivity growth certainly doesn't seem like it is going to happen.

What about the fourth quarter? In the BEA January 29th first release of 2015 fourth quarter GDP for the U.S., the annualized GDP number was 0.7% annualized, which obviously isn't good and is below population growth so GDP would have declined on a per capita basis. So for Ontario, which depends on the U.S as its main export market, that's not a good sign for the fourth quarter number. I would say the numbers for the first quarter of 2016 aren't likely to be strong either, but things could change in the last two months of the quarter.

Hamilton's Second Homicide of 2016 Has Already Occurred, Richard Crowder

There has been yet another homicide in Hamilton on the weekend.Richard Crowder (31 years old) was stabbed on Sunday afternoon (January 24th) at 86 Birge Street, between East and Victoria Avenues North in Ward Three. No suspects have been named.

Two murders in January is well ahead of the pace of last year's six murders.

First Homicide in 2016 For Hamilton,

Hamilton has had its first homicide of 2016, an unidentified woman found strangled to death early Saturday morning at the Admiral Hotel on Dundurn Street North. That is in Ward One. Hamilton had no murders in Ward One in 2015. Hamilton's last murder was Carmon Ward, in Ancaster, as yet unsolved on December 21st.

Canada and Ontario December 2015 Employment Numbers Analysis

Statscan released the December numbers on Friday and they were better than I was expecting (which wasn't much). Canada's seasonal adjusted jobs numbers increased by 22,800 in December. Unfortunately, full-time employment actually decreased by 6,400 jobs, while part-time jobs increased by 29,200 jobs. Year over year, jobs increased by 158,100. Full-time jobs increased by 151,000 versus 7,100 more part-time jobs.

However there does appear to be some caveats. In the Statscan writeup for the month, "In December, the number of self-employed increased by 40,000, while the number of private and public sector employees was little changed." So people could be declaring themselves self-employed out of necessity and there wasn't actually any private sector hiring. 

Ontario had a great December. Jobs increased by 34,900 in December. Full-time jobs increased by a massive 42,200, while part-time jobs decreased by 7,300. Year over year, jobs increased by 80,700.  Full-time jobs increased by 141,600 and part-time jobs actually decreased by 61,800.

Atlanta Fed's GDPNow Model For US Fourth Quarter GDP Fell to 1.3 December 23th

Due to the Xmas break, I didn't really pay much attention to the latest prediction of US fourth quarter GDP growth from the Atlanta Fed's GDPNow model. However on December 23th, the prediction dropped from 1.3% from 1.9%, well below consensus.

If that's true, that's a bad number for the fourth quarter and not good for Canada and especially Ontario's fourth quarter GDP number, as the US is both of their largest market for exports. However GDP can be lowered by higher imports or lower exports, so with the low Canadian dollar it is possible the lower US number was affected by bad trade numbers. Thus maybe things aren't so bad for Ontario having higher exports, although I'm skeptical of the Ontario economy to adjust rapidly to a low dollar, given its high proportion of housing and services in its economy.

I'm still waiting for the third quarter numbers for Ontario's GDP. It should be the strongest one for the entire year, although that will likely not be enough to rescue the year from a sub 2% number, with the possibility of a number closer to 1%. Note that the province's financial accountability officer is predicting GDP growth of 2% in 2015.

Hamilton Finishes With Six Homicides In 2015, 1.35 Per 100,000 Inhabitants (Toronto 2.10)

Hamilton ends up finishing with six murders in 2015, down one from 2014. Note that is the city, not the census area. Using the somewhat out of date Statscan population of 520K from 2011, that's a murder rate of 1.15 per 100,000 inhabitants. To contrast with Toronto which had 55 murders in 2015, or a murder rate of 2.10 per 100,000 (based over the Statscan 2011 population number of 2,615K). Four murders were in the lower city. None on the Mountain, one each in Ancaster and Waterdown. You can find a list of the seven 2014 murders in Hamilton here.

Date of Murder		Victim	Victim's Age	Cause of Death	City Ward	Suspect
January 8th, 2015		Nathan Miller	20	Shooting	3 (28 Madison Avenue)	Male 15, Jemaal Wilson, 20, Shamoiey Akindejoye 21
March 25th, 2015		Renee Neganiwina	26	Fire?	4 (561 Kenilworth Avenue)	Joseph Snelgrove, 38
May 15th, 2015		William McConville	40	Beating	2 (Stinson and Victoria)	Gordon Eugene O'Hara, 33, and Joshua Vernon O'Hara, 27
August 12th, 2015		Shariek Douse	18	Shooting	2 (MacNab Street North and Simcoe Street)	N/A
August 13th?, 2015		Lori Constable	55	Asphyxiation	15 (Riley Street, Waterdown)	Wayne Constable, 55 (husband, deceased, murder suicide
December 21st, 2015		Carmon Ward	60	Shooting	12 (Miller Drive, Ancaster)	N/A