By TERRY WEBER
Globe
and Mail Update
The Canadian economy again ran circles around its U.S.
counterpart in December, pumping out twice as many jobs as expected
while employment south of the border remained on life support.
As with almost every month last year, the December numbers
painted a picture two economies undergoing dramatically different
recoveries.
Figures released Friday show a whopping 58,000 jobs were
created in Canada in December, continuing this country's employment
winning streak and exceeding economists' expected gain twofold. In
2002, Canada enjoyed its highest annual employment growth rate in 15
years.
In the United States — where the economy has yet to mount a
convincing recovery — job losses for the month totalled 101,000.
Consensus forecasts had called for a modest increase of about 20,000
jobs as economists held out hope of signs of a firmer recovery.
For the year, U.S. payroll employment fell by 181,000 positions,
following a loss of 1.4 million jobs in 2001.
'Stunning' differences
"I think it's rather stunning," Toronto-Dominion Bank senior
economist Marc Lévesque told globeandmail.com.
"It's enough to make even the most imaginative of economic
commentators run out of superlatives. That's exactly what's happened
to me. It's rather astounding that Canada is still pumping out jobs
like this when the U.S. economy is suffering."
Throughout 2002, the United States — Canada's biggest trading
partner — struggled to add to its payrolls in each month as that
economy underwent what economists quickly termed a jobless economic
recovery.
Economists had expected that Friday's report would show some
signs of healing in the United States, where the jobless rate held
at 6 per cent in December.
Just days earlier, U.S. President George W. Bush unveiled a
$670-billion (U.S.) economic stimulus package designed to cut taxes
and stimulate job growth. Mr. Bush is "very concerned" about the
continued bleeding shown in Friday's employment report, a White
House spokesman said.
The Canadian dollar, meanwhile, enjoyed its second day of gains
on the news, climbing 0.25 of a cent (U.S.) to 64.71 cents Friday.
"This latest show of strength in employment just brings another
Bank of Canada tightening move that much closer — it still looks
like a spring rate hike by the bank is a very real possibility," BMO
Nesbitt Burns Inc. senior economist Doug Porter said.
The central bank raised rates three times last year but moved to
the sidelines in September, citing risks posed by persistent
economic weakness in the United States and abroad.
Prospects for rates
One sticking point for the Bank of Canada, Mr. Porter said, has
been the slow decline in Canada's unemployment rate, despite the
surprisingly strong job creation numbers.
In Canada, December's unemployment rate held steady at 7.5 per
cent, in line with consensus forecasts. The government agency said,
however, that the rate stayed the same because a large number of
people entered the work force in December.
In his commentary on the Canadian figures, however, TD's Marc
Lévesque pointed out that, had the work force participation rate
remained at its late 2001 level, Canada's unemployment rate would
now be 5.6 per cent, below that of the United States.
"Call it what you wish, but the bottom line is that Canada's job
market has ended the year in grand style, running circles around its
ailing U.S. counterpart," he said.
According to Statscan, over the year, employment rose 3.7 per
cent up 560,000 — the highest annual growth rate since 1987.
Throughout 2002, the Canadian economy has defied expectations,
adding new jobs each month of the year despite the risks posed by
slower economic growth in the United States and Canada.
Boost from manufacturing, construction
"Overall job growth for 2002 was concentrated in manufacturing,
health care and social assistance, educational services and
construction," Statscan said.
"Employment rose in all provinces except Newfoundland and
Labrador."
Many have cautioned that, while the headline numbers in Canada's
recent employment reports have been impressive, the details weren't
nearly as strong, pointing toward a trend of increased part-time
employment and lower paying jobs.
The Canadian Labour Congress noted Friday that in 2002, 40 per
cent of the new jobs were part-time. In December, part-time workers
earned an average of just $224.17 per week.
"Also, 17 per cent of the new jobs came in the form of
self-employment," CLC senior economist Andrew Jackson said.
"These jobs are much less secure, and usually pay much less than
jobs with an employer."
Still, Friday's report offered a still impressive assessment of
the employment situation in this country.
Of the 58,000 jobs created in December, 46,200 were full time and
11,800 were part time. Quebec led the job growth during the month,
Statscan said.
"The proportion of working-age population holding a job rose to
an all-time high of 62.4 per cent in December," according to the
government agency.
"Meanwhile, the labor force participation rate hit 67.5 per cent,
equalled only once before in January, 1990."
For the year overall, the manufacturing sector added "greatly" to
total job growth, adding 125,000 jobs during the year, Statscan
said. That's a 5.6 per cent improvement over 2001.
However, in December, the sector also lost ground, shedding
25,000 jobs. Almost all of those were in Ontario and resulted mainly
from layoffs in the auto industry.
Sectors, provinces
In the construction industry, 14,200 jobs were created, reversing
a loss of jobs in that segment the month before. A total of 62,400
construction jobs were created in Canada last year, reflecting
Canada's booming housing market.
Big gains were also seen in December in educational services,
which added 20,000 positions, and the trade sector, where 19,000
jobs were created.
Employment in management, administrative and other support
services rose by 15,000 positions. Professional, scientific and
technical services added 13,000 jobs in the final month of 2002.
On a provincial basis, Quebec led the nation's job growth in
December, adding 31,000 positions all of which were full-time
jobs.
Ontario's employment was slightly mixed with 14,000 new jobs
added, although the number of unemployed grew by 22,000 resulting in
the jobless rate climbing 0.3 percentage points to 7 per cent.
In Alberta, employment rose by 9,000 positions in December. All
of those jobs were full-time. After three straight months of losses,
employment rebounded in December in Newfoundland and Labrador, with
4,000 new jobs added.
Employment was little changed in the other provinces in December,
although for the year, every province added positions with the
exception of Newfoundland and Labrador.
Saskatchewan had the highest employment growth
rate. | 