January 7, 2011

Carrick: Manufacturing up but construction down in Canada’s December job gain of 22,000

January 7, 2011

Both the U.S. and Canada recorded employment gains in December 2010 that were almost exactly on target with their long-term (20-year) records. The U.S. added 103, 000 jobs according to the Bureau of Labor Statistics and Canada added 22,000, according to Statistics Canada.

Over the past 20 years, the average monthly gain in employment in the U.S. has been 100,000 jobs. In Canada, with about 11% of the U.S. population, the comparable figure has been +17,000.

he recession-induced decline in employment in the U.S. over the two years from December 2007 to December 2009 was 8.4 million. In the latest 12 months, 1.1 million jobs were restored.

During Canada’s jobs recession from October 2008 to July 2009, slightly more than 400,000 jobs were lost. Since mid-2009, the decline has been more than made up with an employment gain of 463,000 jobs.

The unemployment rate in the U.S. dropped 0.4 percentage points in December versus November to stand at 9.4%. Canada’s December unemployment rate stayed steady versus the previous month at 7.6%.

Expectations concerning the December U.S. labor market report were sky-high based on two lead-up indicators. Initial jobless claims dropped to only about 400,000 on average in the two final weeks of last year.

And the National Employment Report (survey based) issued by Automatic Data Processing Inc. (ADP) pointed to a December increase in non-farm private sector payrolls of 297,000. This proved to be too optimistic.

Producers in Canada contended with a currency that was close to or at par with the U.S. dollar during much of 2010. For that reason, it is quite impressive that the manufacturing sector added 66,000 jobs in December. This had positive implications for transportation and warehousing as well (+45,000 jobs) and particularly lifted employment levels in Ontario and Quebec.

With respect to year-over-year Canadian employment, the increase was higher in construction (+4.9%) than in manufacturing (+1.8%).

It is also worth noting that although the gain in full-time work (+1.9%) was quite solid, it was exceeded by the improvement in part-time positions (+3.4%).

Finally, the public sector (+4.2%) hired at a faster pace than the private sector (+1.7%). For the full report by RCD-Canada’s Chief Economist, Alex Carrick, please click here.

You can read the full report by clicking on this link.

-RCD Digital Media

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