Job growth steady on both sides of border
OTTAWA It’s not often you see employment numbers for Canada and the United States moving in lockstep, and both going forward at a steady- but- not Olympic clip.
In the case of the U. S., the economy kept monthly employment growth in July above the 200,000- level — enough for the jobless rate to remain at a sevenyear low of 5.3 per cent.
As for Canada, the pace is closer to baby steps — with 6,600 new jobs created — but heading in the right direction, at least. And that has helped keep the unemployment level at 6.8 per cent, where it has been since February.
“I’m not sure I’ve ever seen a pair of North American employment figures that were as close to consensus as these two,” said Douglas Porter, chief economist at BMO Capital Markets.
“In terms of the headline ( numbers) absolutely no surprise what so ever. From the very big picture, I think the modest job gain in Canada and the solid job gain in the U. S. pretty much capture what’s going on in the two economies.”
Still, most of the new positions created last month were part- time, at about the 24,000 level, with fulltime positions edging down by 17,300 from the June, Statistics Canada said Friday.
At the same time, both private and public positions declined marginally and self- employment jumped by 40,500.
Economists had forecast overall growth of about 5,000 in July. By comparison, in overall employment in June declined by 6,400, with the addition of 64,800 fulltime jobs being offset by a loss of 71,200 part- time positions.
“Despite a cooling in the econo- my during the first half of the year, the trend in the labour market isn’t yet pointing to Canada being in recession,” said Nick Exarhos, economist at CIBC World Markets.
The economy declined in first five months of this year. June’s gross domestic product could also be negative — meeting the broad criteria for a recession of two consecutive quarterly declines.
“The debate over whether Canada is in a full- fledged recession will continue,” said Sherry Cooper, chief economist at Dominion Lending Centres.
That leaves Bank of Canada governor Stephen Poloz in a waitand- see pattern on future interest rate adjustments, following two cuts since the start of this year as the impact of the oil- price plunge began to take its toll on economic growth.
The next rate decision is set for Sept. 9.
“Certainly, the economy contracted in the first half of this year, but consumer spending and housing are still robust, which will likely continue until interest rates start rising,” Cooper said.
So far, no one is forecasting a two- quarter downturn anywhere near the depth and severity of the 2008- 09 recession.
Not surprisingly, resources- dependent Alberta shed more than 4,000 jobs last month, nearly matching June’s losses, Statistics Canada said Friday.
Since the province’s most recent employment peak in September, Alberta’s natural resources sector has lost 28,000 positions, or 15 per cent overall.
Friday’s report showed a drop of 8,300 jobs in construction during June and a loss of 4,600 workers in manufacturing.
Meanwhile, the U. S. employment data could help firm up the Federal Reserve’s liftoff timing for its key lending rate, which has been at near zero since 2008.
Fed chair Janet Yellen has been signalling a September hike if economic pieces fall together by then.
“The way I look at it is the ( U. S.) economy is not weak enough to justify rates as low as they are,” said BMO’s Porter. “I think the sooner they begin proceedings the better.”