The year is not quite over, but already it's safe to say that Canada's job market -- once more -- exceeded both expectations and the United States.
Almost a year ago, when the final numbers came in on 2002, analysts marvelled at Canada's remarkable surge of employment growth. During the year, the economy pumped out a stunning 560,000 jobs, a record in terms of absolute growth. The relative gain of 3.7 per cent wasn't a record, but no one complained.
So far this year (the data go to November), the record is less impressive -- a mere 218,000 jobs, which makes 2003 a middling year for job gains. Even so, no one is complaining about that either. When the year opened, conventional wisdom had it that the job market would bask in its outsized gains to date and go into neutral while production caught up to those expanded payrolls.
The forecasters were both right and wrong. For most of the year, the job market cooled its heels. By August, the economy had created only 52,000 new jobs since December, 2002. Then it turned on the afterburners once more and churned out 166,000 new positions in September, October and November.
South of the border, the lack of job growth continues to be the biggest headache for U.S. policy makers. President George W. Bush wants more jobs to help him get re-elected next November. And at the U.S. Federal Reserve Board, chairman Alan Greenspan needs to see more jobs as evidence that the U.S. recovery is truly on track before he can begin to raise the Fed's benchmark interest rate from its current 1 per cent.
The numbers tell different stories about the U.S. job market in the first 11 months of this year. The widely followed non-farm payroll survey says there were 24,000 fewer jobs in November than in December, 2002, even though employment has grown in the latest four months. That figure is very much at odds with the estimates from the household survey (the U.S. version of our monthly labour force survey) which says the economy has actually created almost 2.2 million jobs during that period. No one pays much attention to the household survey because it's quite volatile.
Despite doubts about the U.S. household survey, no one questions the unemployment rate of 5.9 per cent that it produced in November, down from 6.4 per cent earlier in the year. That rate looks quite benign compared with Canada's 7.5-per-cent jobless rate in November, which was down from 8 per cent a few months earlier.
But the most fascinating comparison of the Canadian and U.S. job markets comes from another measure -- one that is much favoured by economists, but hasn't yet gained much attention from the broader public.
It's called the employment rate. Simply put, it is the ratio of the number of people with jobs to the size of the working age population, which is all those 15 and over in Canada and 16 and over in the United States.
For most of the past quarter-century, Canada's employment rate has been lower than that of the United States. The Canadian rate sneaked above the U.S. rate for a couple of years in the mid-1970s and again in the early 1980s, but then slid below and stayed there for two decades.
No one needs telling that the 1990s were a sorry period for Canada's job market, but the employment rate tells the story best. Between 1989 and 1993, it fell to 58 per cent from 62 per cent, an unprecedented drop of four percentage points. (In the much deeper recession of the early 1980s, it fell only three percentage points, to 57 per cent from 60 per cent.) In the United States, however, the employment rate dipped only slightly -- to 61.5 per cent from 63 per cent -- between 1989 and 1992 before turning up again.
Through the mid-1990s, the U.S. rate charged higher, while Canada's rate skittered sideways. By the final quarter of 1996, the U.S. rate had climbed to over 63 per cent, while Canada's rate was just over 58 per cent, leaving a record gap of more than five percentage points. Had Canada's rate been the same as the U.S. rate in those days, then, an additional 5 per cent of the working-age population would have had jobs -- which works out to 1.2 million people.
Since then, the gap has been closing. The Canadian rate has been rising, while the U.S. rate began sliding in 2000, a result of its recession (the one we escaped) and subsequent period of growth in which productivity grew while employment kept falling.
Canada's rate caught up to the U.S. rate in the first half of this year and has since exceeded it. The October-November data suggest that for the final quarter of this year, Canada's rate will be 62.5 per cent, while the U.S. rate will be 62.3 per cent.
This new balance won't last if the United States begins to create a lot of new jobs. In recent years, Canada has added jobs at the expense of slow productivity growth, while the United States has done the opposite. How both countries will make that trade-off in 2004 is one of the more fascinating questions to be answered next year.
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Fri, Aug 27 2010
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Sat, Jun 6 2009
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By CBC News
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Tue, May 26 2009
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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.
