Economic Snapshot – August 2021
- Unemployment rate at lowest level since February 2020; 7.1% in Canada, and 7.6% in Ontario
- Real GDP dropped slightly in second quarter after three quarterly increases
- The Consumer Price Index (CPI) rose 4.1% on a year-over-year basis in August, the fastest pace since March 2003
- Ontario sees slight increase in wholesale sales, driven by motor and motor vehicle parts and accessories
Select Economic Indicators
National unemployment rate at lowest level since February 2020
The national unemployment rate fell 0.4 percentage points to 7.1% in August, the lowest rate since the onset of the pandemic. The provincial unemployment rate also continued to drop for the third consecutive month, hitting 7.6% in August 2021.
Notably, the national unemployment rate among 15-to-69-year-olds who belong to population groups designated as visible minorities was 9.8% in August, little changed for a second consecutive month.
GDP has slight decline after three consecutive quarterly gains
Real gross domestic product (GDP) moved down 0.3% in the second quarter of 2021, caused largely by considerable declines in home resale activities and exports. This follows three consecutive quarterly increases following the sharp decline seen at the onset of the pandemic (Q2 2020) caused by business and travel restrictions.
Fastest pace of inflation year-over-year since 2003
The Consumer Price Index (CPI) rose 4.1% on a year-over-year basis in August, the fastest pace since March 2003, up from a 3.7% gain in July. Prices rose in seven of the eight major components in August, with transportation prices contributing the most to the increase.
Prices for services rose for the fifth consecutive month, growing more quickly in August (+2.7%) compared with July (+2.6%). Amid the easement of COVID-19 restrictions, reopening of businesses and summer travel contributed to the price increases.
Ontario sees slight increase in wholesale sales, driven by motor and motor vehicle parts and accessories
In Ontario, wholesale sales rose 0.4% to $35.5 billion in July. While sales in the building material and supplies subsector dropped 9.0% to $4.6 billion, sales in the motor and motor vehicle parts and accessories subsector were up 10.7% to $7.3 billion, largely contributing to Ontario’s overall increased sales in July. Demand for vehicles continues to be strong, despite the ongoing disruptions in motor vehicle plant operations and supplies, and lower inventories. In Vaughan, manufacturing remains the largest employment base and one of the largest contributing sectors to Vaughan’s GDP. Manufacturing of motor and motor vehicle parts is a large part of our manufacturing base,and is an important to maintain supply chain across the industry.