economy
ARE WE WORKING ENOUGH? The pace of growth in hours worked by Canadians slowed in the most recent quarter. Our economic output could follow suit.
In last quarter’s landscape, we explored trends in Canadian’s aggregate hours worked as a means of better understanding—and predicting—the timing of recessionary forces. At that time, we noted that growth in aggregate hours worked slowed on a year- over-year basis—or became negative— immediately preceding each of Canada’s last four recessions. So, a good recession predictor then, right? Maybe not, we said, because aggregate hours worked also followed the same pattern three other times without triggering a recession. So why continue to monitor trends in total hours worked by Canadians? Quite simply,
because there is an intuitive connection between howmuch we’re working (the economic input) and howmuch we’re producing (the economic output). And on that front, quarterly GDP growth has slowed to 0.3% in the most recent quarter as the change in aggregate hours worked bobbed closer to zero, with the annual change in total hours worked having fallen to 1.0% from 1.4% over the past quarter. On balance, signs are pointing to continued labour market growth and, by extension, continued growth in hours worked. This in turn should extend the current period of broad-based economic growth across Canada.
MAYBE WE NEED TO WORK SMARTER
6.0%
4.0%
2.0%
0.0%
-2.0%
-4.0%
-6.0%
CHANGE IN QUARTERLY HOURS WORKED AT MAIN JOB REAL QUARTERLY GDP CHANGE RECESSION
SOURCE: LABOUR FORCE SURVEY & NATIONAL ECONOMIC ACCOUNTS, STATISTICS CANADA
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