Statistics Canada released its latest labour force survey on Friday (read the full survey here: http://www.statcan.gc.ca/daily-quotidien/100507/dq100507a-eng.htm ), and it seems to be all good news. Employment grew in April at a rate not seen since 2002. In fact, the rate of employment gains in April was comparable to the magnitude of monthly employment losses that we were seeing in the early months of the recession.
Unemployment in Canada dropped by a modest 0.1 percentage points to 8.1%, and the labour force grew as well by some 100,000 people since March. This seems to indicate that people who were not looking for work before (and therefore would not have been counted as part of the labour force in March) have now restarted their job search.
A look at the Unemployment curve seems to indicate that the trend really did turn in the second half of last year:
Two other related economic news were reported on Friday as well, from the United States:
The first was fairly positive news: The US unemployment numbers were released as well (original report here: http://www.bls.gov/news.release/empsit.nr0.htm ), and even though unemployment increased in the US – from 9.7% to 9.9%. – 290,000 new jobs were actually created in April, mainly in manufacturing, healthcare and hospitality. The reason why unemployment increased was because – like in Canada – more people started looking for work (presumably because they felt that they now have a chance of finding work).
The other news were not so positive and came from Wall Street: Friday was the end of a very volatile “bear-ish” week on the stock markets, on which Dow Jones – the primary stock market index in the US often seen as indicative of the US stock markets in general – turned negative for the year. The reason was primarily the financial crisis in Greece and fears resulting from the lack of clarity of how it is going to affect other world’s economies. Greece is a member of the Euro zone, and its difficulties are bound to affect other countries in the Euro area.
Greece is certainly far away from North America, and is not a significant trading partner of either Canada or the US. What is not clear, however, is how bad the situation in Europe will really get (problems may spill over to other volatile members of the Euro area – like Spain, Portugal, Ireland, and even Italy), and to what extent this will impact the economies outside of Europe. While Greece is not a significant trading partner of Canada, the EU is. A severe deepening of the crisis there might hurt the still fragile recovery in Canada and the US.
Analysis that we produce at Vicinity Jobs also point to some reasons to be cautious: While we did see quite high hiring demand levels in March (leading, to a great extent, to the solid job creation in April), those receded again in April (disclosure: we only analyze hiring demand in a small subset of communities in Canada – so our numbers are more volatile and not always representative of the country as a whole). In another post in our blog earlier this week we also explained why we think that the economic recovery is still fragile (found here: http://blog.vicinityjobs.com/canadas-economy-growing-again-but-recovery-still-fragile/ ). So unemployment declines may not be steady in the coming months.
However, in light of the relatively strong and steady performance that the Canadian job market has delivered in recent months, at this point, the recovery in Canada has a fairly good chance of surviving the challenges resulting from Europe’s economic troubles. Don’t expect fast declines in the unemployment rate quite yet – the uncertainties will likely stay with us for a while.