Canada loses jobs as hiring in U. S. soars

Neighbour expected to pull us toward recovery

OTTAWA — Let’s put the cart before the horse.

Canada’s economy may have hit another dip on the way to sustainable employment growth, but at least it hasn’t gone too far off track.

And given that the U. S., which posted surprisingly robust job numbers on Friday, is expected to help pull us along the recovery route, it’s safe to assume we’ll pick up the pace of job creation as well — just not as quickly or strongly as our neighbours.

Canada lost a net 10,700 jobs in November, a level the federal data agency likes to call “statistically insignificant,” given the margin of error in the top line of its labour force survey is an over- arching 28,500.

Nevertheless, that helped push the official unemployment rate marginally higher, coming after two consecutive strong monthly hiring reports that previously took the jobless reading to a six- year low.

Most economists had forecast an overall increase of about 5,000 positions last month — again, within the margin of error — following sizable back- to- back net job creation in September and October, the first time that has happened since November and December 2012.

In Friday’s labour report, Statistics Canada said the public sector added 22,600 workers last month, while the economy shed 45,600 positions from the private sector.

“All in all, despite the relatively modest drop in employment for November, Canada’s labour market still appears to be on better footing heading into the end of the year,” said Nick Exarhos, an economist at CIBC World Markets.

Despite the bump- up in the jobless rate to 6.6 per cent in November from 6.5 per cent the previous month, “the level remains nearly a half- point below the level only three months ago,” Exarhos said.

David Madani, an economist at Capital Economics, said “average monthly job gains over the previous six months of 21,300 continues to suggest that the economy may finally be turning the corner.”

“That supports the Bank of Canada’s dovish view that there is still excess slack in the labour markets,” he said, adding that Friday’s employment report won’t sway policymakers “one way or the other, reinforcing the view that interest rates are likely to remain low for sometime yet.”

The timing of any hike in borrowing costs in Canada will also be dependent on moves by the U. S. Federal Reserve, which could get a push from an extremely strong hiring report, also released Friday, showing payrolls jumped by 321,000 in November — close to a three- year peak.

Although the U. S. unemployment pace was unchanged at 5.8 per cent, that’s the lowest level in six years.

“If we needed any more evidence that the U. S. economy is off to the races, this is it,” said Andrew Labelle at TD Economics.

“November was the 10th- consecutive month with over 200,000 jobs created, and along with a slew of other positive data, including the ISM surveys and vehicle sales for November, suggests that the U. S. economy is on very firm footing.”

Many analysts now suspect the U. S. Fed, which has held its key rate near zero since December 2008, could begin gradually raising lending levels before mid- 2015 — a few months ahead of previous predictions.

In this country, the labour market had been showing some consistent growth in recent months as the economy picked up steam, thanks to positive signs of recovery in the U. S. and a weak Canadian dollar that has help the country’s export market.

But the Bank of Canada said Wednesday that lower- than- anticipated oil prices “will weigh” on the economy, although it still expects to see a “broadening recovery.”

“On the job side, I think we’ll probably underperform the U. S. for a while,” said Benjamin Reitzes, senior economist at BMO Capital Markets.

“We haven’t done all that badly this year. Growth is probably going to outpace the U. S. for all of 2014, so that’s pretty good. Next year, the U. S. is going to pick up — meaningfully more, though,” he said. “At their mercy, we’ll hitch are wagon to them and they’ll pull us along, but we won’t quite grow at their pace.”