To date in 2018, Canada has made no forward progress in total jobs creation.
According to Statistics Canada, the latest month’s step back of -8,000 jobs has brought January-to-May’s result to a disappointing -49,000 jobs.
During the first five months of last year, the average monthly change in total employment was +28,000 jobs. The comparable figure for this year has been -10,000.
There have been similar poor performances in many of the major sub-categories of work.
The monthly average change in services employment, January to May of last year, was +20,000, whereas this year, it’s been zero.
The monthly average change in manufacturing employment in the first five months of last year was +9,000. Replace the positive sign with a negative and the result has been -9,000 so far in 2018.
And construction employment has apparently lost the way on its meandering path. Last year’s average monthly jobs change of +1,000 has deteriorated to -6,000 this year.
The national ‘headline’ unemployment rate, however, has stayed low at 5.8% for the fourth month in a row. (By way of comparison, the U.S. jobless rate is currently 3.8%.)
In year-over-year percentage-change comparisons, Canada has been faring poorly versus the U.S. In ‘total’ jobs, it’s been the U.S. +1.6% to Canada’s +1.3%; in ‘services’, +1.7% to +1.3%.
In manufacturing and construction, the U.S. has been +2.1% and +4.1% respectively. Canada has been a more restrained +0.1% for manufacturing and +1.7% for construction.
Despite recent lackluster jobs creation north of the border, compensation levels have been rising aggressively. Average hourly wages for all jobs Canada-wide in May were a ‘stand up and get noticed’ +3.9% year over year and average weekly wages were an even more assertive +4.2%.
Among major industrial sub-sectors in Canada, the only one presently recording an especially strong year-over-year advance in jobs is ‘leisure and hospitality’, at +4.7%.
In the U.S., an exceptionally healthy labor market – i.e., one often described as being so tight there is virtual full employment − is providing justification for the Federal Reserve to keep on raising interest rates.
The only question left to ponder is whether there will be two increases of 25 basis points (+0.25%), or three, from now until the end of this year.
In Canada, the central bank has a lot more uncertainty on its hands. Chief among a panoply of worries is the deteriorating trade relationship with America. There are U.S. tariffs on lumber, steel and aluminum to be overcome.
Plus, a continuation of the NAFTA trading arrangement has become endangered.
Nevertheless, the Bank of Canada is hinting that it’s likely to move its key policy-setting interest rate upward in July.
As for labour markets regionally in Canada, British Columbia had the lowest unemployment rate among all provinces in May, at 4.8%. Second- and third-place positions were held by Quebec, 5.3%, and Ontario, 5.7%.
But B.C. has begun to falter in the creation of new jobs. The province’s year-over-year record of employment change in the latest month was only +4,000 jobs, which paled beside Ontario’s +126,000, Quebec’s +65,000 and Alberta’s +37,000.
The citizens of Ontario went to the polls on June 7th and, in a bit of shocker, elected a right-wing Progressive Conservative majority government. The PCs have been promising reduced personal and corporate taxes, a reining-in of electricity costs, stiff opposition to some environmental measures and a generally more welcoming climate for business investment.
The Toronto Stock Exchange has been stuck in neutral for years. Among provinces, Ontario with its large population base and well-diversified economy is Canada’s powerhouse.
It will soon be determined whether the new landlord at Queen’s Park will ignite a spark under the TSX.