October 19, 2011
In September, Canada’s labour market soared while the U.S. rose gently
Chief Economist, CanaData
There’s a lot to like about Canada’s September labour market report from Statistics Canada.
According to Statistics Canada, 61,000 jobs were created nationally in the latest month.
Furthermore, the composition of that employment gain was very favourable.
All of the new jobs were in the full-time category. Part-time work was flat.
Full-time work is usually more stable and higher paying. It requires a greater commitment on the part of employers, indicating they are sure of their own decent prospects.
By way of contrast, part-time workers are easier to shed when conditions turn difficult, since they don’t have tenure and aren’t locked into pension plans and other benefits.
Manufacturing employment in the latest month fell by 24,000 while construction increased by 12,000. The service-sector job gain was 54,000.
Service sector work accounts for nearly 80% of all jobs in Canada.
Year to date, the number of manufacturing jobs in the country has fallen by 25,000. The number of people finding employment in construction since January has risen by 51,000.
In other words, the trend towards fewer manufacturing jobs and more construction jobs, evident throughout most of the 00s, has not abated.
Total employment in Canada is up by 270,000 since the beginning of this year. The overall net gain in employment since the recessionary trough in July 2009 has been 650,000 jobs.
Taking a look at the rest of the world, that’s a remarkable achievement. The U.S. still has a shortfall in employment of nearly seven million jobs versus its 2009 recessionary low.
Canada’s unemployment rate in September dropped from 7.3% to 7.1%.
That’s not bad. It’s only about one percentage point above being outstanding.
It’s a rare event in Canada when the jobless rate falls below 6.0%.
The U.S. jobless figure in September stayed at 9.1%, the same as in July and August, according to the Bureau of Labor Statistics.
While Canada’s employment gain was quite positive, the U.S. recorded a number that was okay, but not shout-worthy.
The U.S. Department of Labor reported Initial jobless claims south of the border have been hovering around 400,000 for the past couple of weeks.
This gave early indication that the monthly employment gain would be about in line with what is needed to take up the natural increase in the labour force.
In fact, that’s what occurred. The jobs gain in September was 103,000. Hence the stable unemployment rate.
Included in the U.S. report is a special note. A significant portion of September’s rise in employment was due to a return to work by 45,000 people in the telecommunications sector who had been on strike in August.
However, it should also be noted that there were 34,000 fewer government jobs in September than the month before, meaning the private sector has stepped up more than might be obvious.
On a year-over-year basis, U.S. total employment is +1.1%. Both services (+1.6%) and manufacturing (+1.7%) have exceeded that rate of jobs growth.
(Canada’s year-over-year increase in jobs in September was +1.7%. When both countries are operating closer to full capacity, a figure of +2.0% to +2.5% is common.)
The U.S. sub-sector with the most noteworthy year-over-year percentage increase in employment has been professional and business services (+3.4%). Temporary help services are included in this category, helping to bump up the result.
Returning to Canada for a moment, some of the regional data provides a nice wrap-up.
The biggest increase in employment in September was recorded in B.C., +32,000. Adding to the good news for that province, the new jobs were all in the full-time category.
In terms of year-over-year percentage gain in employment, Alberta (+4.8%) has been the standout among the provinces.
Ground is again being broken on major oilsands projects in Alberta. In the last couple of months, billions of dollars worth of mega project work has gotten underway.
This is great news, but there are concerns on two fronts. There is the possibility that environmental protest movements and political expediency may cause pipeline delivery construction to be halted in the U.S.
Also, the outlook for global oil prices remains uncertain due to the world economic slowdown. The level has already fallen below $80 U.S. per barrel.
Saskatchewan (4.6%) recorded the lowest unemployment rate among the provinces in the latest month. Resources are driving the local economy.
Ontario’s jobless rate (7.6%) was slightly higher than the national average. Still, the province registered an impressive year-over-year decline of 1.1 percentage points. The Canada-wide drop in the unemployment rate since September of last year has been less, at 0.9 percentage points.
For more articles by Alex Carrick on the Canadian and U.S. economies, please see his market insights. Mr. Carrick also has an economics blog. His lifestyle blog is at www.alexcarrick.com
