Canadian Economic Indicators

When you study the economic conditions in Canada in order to make better trade decisions on the forex market you should pay attention to the following economic indicators:

Canadian Unemployment Rate Indicator

The unemployment rate of a country presents the number of unemployed people. It is usually presented as a percentage of the total labor force of the country.

Gross Domestic Product (GDP) Indicator

The GDP (also known as economic output) indicates the total amounts of goods and services that have been produced within the boundaries of Canada for a particular year. This indicator gives a view on the income that has been generated in the country through production. GDP calculations include only final goods and services in order to avoid including several times one and the same good that has been used for the production of other goods and services.

Consumer Price Index (CPI) Indicator

The CPI is based on a basket of consumer goods and services and aims to measure changes in the prices of these goods and services. It is used to measure changes in inflation levels. If the price levels over a particular time period increase, then there is a rise in inflation. Thus, the purchasing power of the currency is decreased.

The BoC and the federal government have set a 1 to 3 % as a target level for inflation.

Producer Price Index (PPI) Indicator

In order to find information on the average changes in the selling prices that local producers receive for their goods and services, you should refer to the PPP. It includes information on the selling prices received by producers from almost all of the industries that operate within a country (e.g. electricity and natural gas, agriculture, manufacturing and etc.). The forex market tends to focus its attention to seasonally adjusted finished goods PPI.

Consumer Consumption Indicator

The current expenditures of households and producers of private non-profit services for households are measured through the consumer consumption indicator. Both durable and non-durable goods are included in this indicator and expenditures on dwellings and of a capital nature (incurred by unincorporated enterprises) are excluded.

Balance of Trade Indicator

In order to find information on a country's trade with goods and services you should refer to its balance of trade statement. Information on trade activities with manufactured goods, raw materials, transportation and etc. is included. The balance of trade is calculated by deducting the amounts of goods and services exported and those imported. Trade surplus is observed when the country exports more than it imports, resulting in a positive balance of trade. On the other hand, a trade deficit is incurred when the country imports more than it exports, resulting in a negative balance of trade statement.

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