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Rates and Statistics

Rates and Statistics

Monetary Policy Indicators

Indicators of Capacity and Inflation Pressures for Canada

The Bank of Canada monitors a wide range of indicators in assessing the extent of pressures on capacity and inflation.The Bank's conventional estimate of the output gap provides an overall assessment of the degree of slack in the economy, but this estimate is subject to considerable uncertainty. This uncertainty is addressed by considering a wide range of indicators in various markets. Many of these indicators are derived from data published by Statistics Canada, but some reflect information gathered by the Bank's regional representatives as well as by various outside sources. For further discussion of uncertainty as well as the information and analysis used to inform monetary policy decisions at the Bank of Canada, see Jenkins and Longworth¹ (2002) and Macklem² (2002).

1. Jenkins, Paul and David Longworth, "Monetary Policy and Uncertainty." Bank of Canada Review, Summer 2002: 3-10.
2. Macklem, Tiff, "Information and Analysis for Monetary Policy: Coming to a Decision." Bank of Canada Review, Summer 2002: 11-18.

(Sources) (Printer-friendly tables)

Note: The following tables are updated two days after the Bank's most recent announcement date for the target overnight rate, based on information available up to that date. When there is a Monetary Policy Report, the tables are updated on the release date of the Report, again based on information available up to the last fixed announcement date.

Updated: 18 October 2007
Next update: 6 December 2007

Inflation (year-over-year percentage change) Selected definitions, graphs and historical data	2005Q4	2006Q1	2006Q2	2006Q3	2006Q4	2007Q1	2007Q2	Latest data
Core inflation	1.5	1.7	1.8	2.1	2.3	2.3	2.4	2.2^Aug
CPI excluding food, energy, and the effect of changes in indirect taxes	1.4	1.4	1.7	2.0	2.2	2.3	2.5	2.2^Aug
CPIW	1.8	1.8	1.8	1.4	1.5	1.7	1.9	2.1^Aug
Weighted median	2.2	2.5	2.0	1.9	1.8	2.2	2.2	2.4^Aug
CPI Inflation	2.2	2.4	2.6	1.7	1.4	1.8	2.2	1.7^Aug
Chain price index for GDP	4.2	3.5	3.1	2.0	0.9	2.5	3.5	3.5^Q2
Chain price index for consumption	1.7	1.8	1.7	1.1	0.9	1.3	1.4	1.4^Q2
Chain price index for consumption excluding food and energy	1.0	1.0	1.0	0.9	1.1	1.3	1.4	1.4^Q2

Product market Selected definitions, graphs and historical data		2005Q4	2006Q1	2006Q2	2006Q3	2006Q4	2007Q1	2007Q2	2007Q3	Latest data
Output gap (Bank of Canada's conventional measure)		1.1	1.3	1.0	0.6	0.3	0.6	0.8	0.8	0.8^Q3 *
Capacity utilization rate	Non-farm goods (%) (1987-2001 avg. = 83.35)	86.0	85.8	84.6	83.5	82.4	82.8	83.0		83.0^Q2
Capacity utilization rate	Manufacturing (%) (1987-2001 avg. = 81.80)	84.8	84.9	83.3	82.2	81.0	81.0	81.3		81.3^Q2
Bank of Canada Regional Office Survey	Difficulty meeting and unanticipated increase in demand/sales (% firms)	49.6	44.6	47.6	46.6	49.5	50.0	55.0	53.8	53.8^Q3
Unfilled orders/shipments - Manufacturing excluding aerospace products and parts		0.56	0.57	0.56	0.54	0.53	0.61	0.61		0.63^Aug
Aggregate stock-to-sales ratio		0.607	0.616	0.626	0.627	0.624	0.614	0.607		0.607^Q2

* As shown in the most recent issue of the Monetary Policy Report.

Labour market Selected definitions, graphs and historical data	2005Q4	2006Q1	2006Q2	2006Q3	2006Q4	2007Q1	2007Q2	2007Q3	Latest data
Unemployment rate (%)	6.5	6.4	6.2	6.4	6.2	6.1	6.1	6.0	5.9^Sep
Participation rate (%)	67.1	67.1	67.2	67.2	67.2	67.6	67.6	67.5	67.5^Sep
Growth in employment (annualized rate, %)	2.3	1.7	2.9	0.6	2.4	3.9	1.3	1.7	0.3^Sep (1)
Skilled labour shortage (% firms) - Manufacturing (Statscan survey)	9.0	6.0	8.0	9.0	10.0	11.0	12.0	11.0	11.0^Q3
Labour shortage (% firms) - All sectors (Bank of Canada Regional Office Survey)	49.0	44.0	27.0	37.0	35.0	41.0	33.0	41.0	41.0^Q3

1. Percentage change at monthly rate.

Wages and costs (year-over-year percentage change) Selected definitions, graphs and historical data		2005Q4	2006Q1	2006Q2	2006Q3	2006Q4	2007Q1	2007Q2	2007Q3	Latest data
Labour Force Survey - average hourly earnings (unweighted)	All employees	3.9	3.4	3.4	3.5	2.9	2.4	3.1	4.0	4.2^Sep
Labour Force Survey - average hourly earnings (unweighted)	Permanent employees	3.6	3.2	3.6	3.8	2.8	2.3	2.9	3.8	4.1^Sep
Wage settlements - Private sector		2.1	2.5	2.2	2.5	1.4	2.6	3.1		3.7^Aug
Compensation per hour - Business sector		6.0	4.8	4.3	3.5	3.9	5.1	5.7		5.7^Q2
Unit labour costs - Total economy (labour income/GDP at market prices)		3.3	3.7	2.9	3.1	3.8	3.4	4.4		4.4^Q2
Unit labour costs - Business sector		3.5	2.7	2.6	3.1	3.7	4.4	4.8		4.8^Q2
Bank of Canada commodity price index	Total	31.5	16.9	16.1	3.2	-5.2	4.3	6.7	4.5	12.5^Sep
	Energy	57.4	27.5	14.1	-12.6	-24.6	-8.1	-0.2	3.9	21.9^Sep
	Non-energy	6.3	6.9	18.3	24.9	22.7	18.2	13.7	5.1	4.5^Sep

Real estate market (year-over-year percentage change) Selected definitions, graphs and historical data		2005Q4	2006Q1	2006Q2	2006Q3	2006Q4	2007Q1	2007Q2	2007Q3	Latest data
New-housing price index		5.6	7.0	9.1	11.6	11.2	9.8	8.4		6.5^Aug
Resale-housing prices: www.royallepage.com		7.3	8.3	9.5	10.7	10.0	8.4	9.1		9.1^Q2
Vacancy rate	apartments (%)	2.7				2.6				2.6^06Q4
	offices (%)	8.2	7.4	7.1	7.1	6.5	6.5	6.5	6.4	6.4^Q3
	industrial market (%)	4.4	4.3	4.3	4.3	4.6	4.8	4.8		4.8^Q2

Expectations (year-over-year percentage change) Selected definitions and graphs		2005Q4	2006Q1	2006Q2	2006Q3	2006Q4	2007Q1	2007Q2	2007Q3	Latest data
www.conferenceboard.ca Percentage of firms expecting price increases over the next six months of:	1% or less	8	9	13	13	23	12	11		11^Q2
	2% or less	49	52	58	63	68	55	62		62^Q2
	3% or less	88	95	93	95	89	87	91		91^Q2
	more than 3%	12	4	5	5	11	13	9		9^Q2
www.consensuseconomics.com CPI inflation: Consensus Forecasts	2006	2.3	2.0	2.0	2.1	2.1				2.0^Dec
	2007		1.8	1.8	1.8	1.8	1.6	2.1	2.4	2.3^Sep
	2008						2.1	2.1	2.3	2.3^Sep
	2-3 years	2.0		2.0		2.0				2.0
	6-10 years	2.0		2.0		2.0				2.0
Bank of Canada Regional Office Survey — Percentage of firms expecting CPI inflation over the next two years to be:	Less than 1%	0	2	0	0	1	1	1	0	0^Q3
	1-2%	14	15	15	15	26	28	14	16	16^Q3
	2-3%	61	63	61	63	60	60	70	68	68^Q3
	more than 3%	19	18	22	20	11	10	14	12	12^Q3
Expectations implicit in real/nominal bond spread		2.6	2.7	2.7	2.6	2.4	2.4	2.4	2.3	2.3^Sep