GDP gains yet to bite into jobless rate

http://www.theglobeandmail.com/report-on-business/economy/gdp-gains-yet-to-bite-into-jobless-rate/article1923213/

Summary
The GDP of Canada grew to 3.3 percent rate in the fourth quarter of 2010, which is primarily due to the gains in exports, especially the crude oil. However, the pushing factors of exports are depends on whether the protests in the Middle East would still last, which would definitely rise the price of oils. Despite the fact of the GDP growth, it may not cut too much on the 7.8 percent unemployment rate. That’s because brighter prospects are attracting people back into the work force, but not all are looking for jobs right away. Also, many people have had to settle for part-time employment, which created a measure of total hours worked in Canada well below the historical trends.



Connection
The growth of GDP in the fourth quarter reflects that the value of all final goods and services produced in Canada in this specific quarter has gone up. However, the increase in GDP cannot prove that people’s living standard improves. It will be improving only as long as GDP is increasing at a faster rate than the population. Also, GDP increases have to be compared to the inflation. One of the important components of Canada’s gross domestic product is the exports. Canadian-made automobiles are produced for the U.S market, and products like wheat and paper are also produced to residents of other countries.



Reflection
I think the growth in GDP in the fourth quarter is mainly because of the riots in Egypt and Labia. Whenever there are conflicts in the world, the price of gold and oil would go up. This directly benefits Canada’s crude oil exports where oil export volumes hit a record in the quarter and total sales abroad grew 4 percent. Also I believed that the consumers spending on goods contributed a lot to the GDP growth. More and more Canadians are spending money, it shows that people are starting to earn more income and are more confident about the economy market. In addition to that, the GDP growth would definitely increase consumers’ confidences toward the economy.