The rise in the LEI was once again primarily driven by a surge in the housing market. Jumping by 10.2 percent, the housing index component of the LEI remained the strongest of the indices, followed by gains in the financial and commodity markets. Overall, only six of the 10 components of the LEI saw increases, suggesting that the recovery remains uneven.
Cross argues that the gains posted in August were largely reflective of unprecedented monetary and fiscal stimulus that governments in Canada have been pouring into the economy. While certainly helpful at buoying otherwise stagnant growth, this stimulus has failed to improve real outputs or Canada’s lagging employment situation.