Canada Generates Surprisingly Strong Job Growth

On a day when the United States licks its economic wounds and the Obama administration struggles to spin the anemic jobs report, we do not need to look far for positive employment news.

Where should we look? Northward, as our friends in Canada are thriving compared to the struggles we are experiencing.

Let’s navigate and review the Financial Post’s report, Canadian Employment Grows More Than Expected in June,>>>>>

Canada saw more job gains than expected last month, with most gains in the part-time sector and a hefty decline in self-employed individuals.

There were 28,400 more people employed last month, Statistics Canada said Friday. Economists expected employment growth of 15,000.

The unemployment rate for June was 7.4 per cent, unchanged from May as more people jumped into the job hunt.

It was the third-straight month of job gains. There has been just one month of declines in the last nine, and that was a relatively minor loss of 1,500 in March.

“The report provides some encouraging news that labour markets continue to strengthen with the employment gain in June building further on May’s 22,300 increase and the 58,300 surge in April,” said Paul Ferley, assistant chief economist with RBC Economics Research.

Craig Alexander, chief economist with TD Economics, said the results were “surprisingly strong, given the recent economic activity data which suggest that Canadian economic growth has slowed.”

There were 3,300 more people working to produce goods in June, while a far greater number — 25,100 — found service work.

There were job gains in transportation and warehousing, declines in professional, scientific and technical services, while most other sectors were relatively unchanged, Statistics Canada said.

Full-time employment grew by 7,300, while a more robust gain of 21,100 was seen in the number of part-time workers.

“While the details of the release may not be as impressive as the sturdy headline gain, there is no denying that the Canadian job market continues to make impressive progress,” said Douglas Porter, deputy chief economist with BMO Capital Markets.

Porter noted that there has been job gains of 192,000 in the first half of this year, which would be the bulk of the year-to-year employment growth of 238,000 that stood as of last month.

More people were working for others last month, and fewer working for themselves. Public-sector employment grew by 50,700 people in June, private-sector employment was up 21,900, while 44,200 fewer were self-employed.

Emanuella Enenajoran, economist with CIBC World Markets, said this suggests “an improvement in the overall quality of employment,” though she noted that temporary census work was likely responsible for some of the public-sector gains.

Ontario, Alberta and Nova Scotia saw the strongest job gains in June. There were fewer people employed in Quebec and Newfoundland and Labrador, while the situation was relatively stable in other parts of the country.

Economists, including Enenajoran, Ferley and Porter, said June’s jobs data provide another reason to think the Bank of Canada will raise interest rates later this year.

Comparing Canada to the United States, our friends to the North are approximately one-tenth our size both in terms of population and economic output. That said, I think there is a wealth of ‘sense on cents’ going on up there. Canada did not engage in the financial engineering which leveraged our economy and are thus not forced to pay the price of unwinding that engineering currently.

What do you think of that, eh?

We may want to incorporate some of that fiscal prudence and disciplined ‘sense on cents’ into our national fabric, eh!! I think so.

Eh, navigate accordingly!!

I hope some of our Sense on Cents friends north of the border will share some of their ‘sense on cents’ with us.

Larry Doyle

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I have no affiliation or business interest with any entity referenced in this commentary. The opinions expressed are my own. I am a proponent of real transparency within our markets, our economy, and our political realm so that meaningful investor confidence and investor protection can be achieved.

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