Большой передел мира

Happy Monday Morning!
Canadian economic data over the past few weeks has been unambiguously negative. The labour force shed 71,000 jobs in November, the largest decline in a decade. Meanwhile, recent reports suggest consumer insolvencies jumped 19% from a year earlier, the biggest annual gain since 2009. So far in 2019, there have been 102,023 consumer insolvencies, the second-most for the first nine months of a year in records dating back to 1987. If that weren't enough, the latest spat of data shows Canadian retail sales fell 1.2% in October, retail sales volumes have essentially flatlined for the past two years.
A contracting labour market, rising insolvencies, and flat retail sales volumes. All of this points to an over leveraged consumer struggling to keep their head above water despite interest rates frozen below 2%. Certainly not an environment where one would expect to see rising home prices, but that is surprisingly the case in recent months.
National home sales are humming above ten year averages, while prices ticked higher again in November, growing 2.4% year-over-year.
“With the exception of housing markets, Canadian economic releases in the past few weeks have been unambiguously negative,” noted Omar Abdelrahman, economist at TD remarked in a note to clients.
Indeed, the economy and the housing market are telling two entirely different stories. Although, human stimulus is certainly playing a factor.
An influx of immigrants and non-permanent residents boosted Canada's population by 0.6 per cent in the third quarter, the biggest increase in records dating back almost five decades.
The country's population grew by 208,234 in the July to September period, with some 83 per cent of that increase due to international migration, according to estimates from Statistics Canada released Thursday in Ottawa. Growth of this magnitude from international migration “had never been seen before in a single quarter."
Can the human stimulus program continue to mask over our deeper underlying economic woes? It certainly sets the stage for an interesting 2020.

Three Things I'm Watching:
1. As housing goes so too does consumption. Retail spending has closely mirrored the Teranet home price index in Canada.

2. National home prices are trending higher, growing 2.4% year-over-year in November.

3. Consumer insolvencies are growing at a rapid pace, particularly in Alberta & Ontario.

Merry Christmas & Happy Holidays.