In the end, its all about jobs, jobs, jobs. And the results so far this year, as well as the outlook going forward, arent good.
It really does appear as if Canadas labour market is about to buckle, Toronto Dominion Bank senior economist Marc Levesque warns clients in a commentary on national job numbers, pointing to a loss of 13,100 jobs in May on top of 18,800 lost in April.
He further notes that the average monthly gain in jobs so far this year is now down to a mere 7,100, which is a far cry from the whopping average of more than 46,000 new jobs created per month throughout 2002. The numbers, he writes, confirm without a shadow of doubt that the bright glow of last years red-hot labour market has turned into little more than a feeble flicker.
Yes, some of it and more to come has to do with the SARS outbreak, and mad cow disease, and Americans by the hundreds of thousands deciding for these and other reasons we all know about that this is a good time to stay away from Canada. The tourism season in Nova Scotia looks to be shaping up as a disaster, and the effect of that on jobs can already be seen in the unemployment rate, which last month rose to 8.9 per cent from 8.6 in April.
Likely to get worse
But theres also continuing bad news in export-oriented sectors, which analysts say is likely to get worse as this year unfolds.
The Canadian manufacturing sector has seen employment decline in five of the past six months, for a total loss of 67,000 jobs.
Sluggish export activity is also blamed for the loss of 12,000 jobs in transportation and warehousing last month, with more to come.
Weakness in this component, warns Bank of Montreal assistant chief economist Paul Ferley, will likely be even more pronounced in June, as mad cow disease in Alberta and an attendant ban on Canadian beef exports to the U.S. are reflected in the numbers.
This number will also weigh on the food processing component within manufacturing, Ferley says.
Jobless recovery
Another major worry is the development of whats called the jobless recovery in the American economy a phenomenon that hasnt been seen in more than a decade.
Thats a moniker given to an economy that is growing, as the U.S. economy has been doing since the start of 2002 if somewhat sluggishly, at around two per cent but the benefits of that growth have not yet shown up in job creation.
Two million jobs lost in the American economy, including 525,000 in the last three months alone, will sooner or later translate into a loss of consumer confidence south of the border. Another drop in the U.S. Federal Reserve Boards trend-setting interest rate might help keep consumer spending in the short term, but a growing unemployment line eventually will spook them into closing their wallets.
Is there a way out of this mess, you ask?
Well, with SARS, mad cow, and job losses combined, not in the short term.
The hope is that the first two are short-term drags on the Canadian economy and will eventually fade away. If we can combine that with a continued turnaround in the U.S. economy that eventually starts creating jobs again, theres some hope over the medium term as in later this year and into 2004.
In the meantime, hunker down, folks.
Canadian wages on the rise
By Sunny Freeman
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Fri, Aug 27 2010
Canadians have been bringing home more money each week than they did during the economic downturn, when jobs and workers´ hours were slashed, but economists warn a return to recession in the United States could derail rising incomes.
Unemployment hits 15-year high in Ontario
By Madhavi Acharya, Tom Yew, Rita Trichur
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Sat, Jun 6 2009
Overall, Ontario was walloped by a net loss of 60,000 positions, bringing the province´s running tally of employment losses to 234,000 since the labour market peaked last October.
Employment insurance numbers jumped 10% in March
By CBC News
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Tue, May 26 2009
The number of Canadians collecting regular employment insurance benefits grew by 65,300, or more than 10 per cent, in March, marking the biggest monthly increase since the job market began to deteriorate in October.
Rising Gas Prices Guzzle Take-Home Pay
By Maura Pallera, Salary.com
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Thu, Aug 14 2008
This summer, Americans were paying, on average, $4.09 per gallon for regular unleaded gasoline to fuel the vehicles they rely on to get to and from work everyday. This represents an increase of $1.14 over the same time last year.
Immigrant employment rising, StatsCan report says
By Eric Beauchesne, Canwest News Service
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Wed, May 14 2008
OTTAWA - Immigrant employment, seen as a way to offset projected labour shortages, increased sharply last year in Canada, easily outpacing that of native-born workers, Statistics Canada reported Tuesday.
