There are three very important labour market releases out this morning: both Canada and the U.S. published their November employment numbers, and Statistics Canada also released the labour productivity growth figures for the July-September period.
Here’s a quick look at the numbers, plus a list of recommended readings if you want to know more about the context and significance of these economic indicators.
Employment and Unemployment in Canada
All is well in the Canadian labour market—much better than expected, in fact. The economy churned out an impressive 59,000 more jobs in November, well above the consensus expectation of a 7,500 gain. The hiring came mostly from the private sector and in terms of full-time jobs, and employment levels increased or were unchanged across all provinces. The unemployment rate dipped 0.2 percentage points to 7.2 per cent, the lowest level since March and below the consensus forecast of 7.4 per cent unemployment.
The numbers could be an indication that economic growth is rebounding in the last three months of the year after GDP growth dropped to a meagre 0.6 per cent between July and September.
|1. The Haves and Have Nots of Canada’s Labour Market. CIBC’s Benjamin Tal finds Canada has a shortage of doctors, nurses, engineers and scientists (among others) and a surplus of butchers, bakers, office managers, blue-collar manufacturing workers and school teachers.||2. The Bank of Canada’s Financial Systems Review. Skip to page 31, where the BoC discusses how a sharp rise in unemployment would provoke a spike in the percentage of Canadian households unable to repay their loans in time.|
Employment and Unemployment in the U.S.
Good news south of the border as well. The economy added 146,000 in November, which was below this year’s monthly average of 151,000 gains, but well above the consensus expectation of a dismal 95,000 jobs gain. The disruptions wrought by Superstorm Sandy, it turns out, didn’t affect national employment trends all that much. The unemployment rate edged down to 7.7 per cent from 7.9 per cent in October.
|1. A brief history of US unemployment. Fabulous Washington Post analysis of unemployment trends and federal government attempts to bring the rate down since the end of WWII.||2. A bathtub theory of unemployment. Econowatch post in which Stephen Gordon explains why unemployment jumped up so quickly but is declining so slowly.|
Labour productivity in Canada
These numbers are much less flattering. Canadian workers’ productivity, or the output produced on average per hour worked (which is measure by dividing real GDP by an estimate of total hours worked over a certain period), dipped 0.5 per cent between July and September after declining 0.6 per cent between April and June.
Average hourly wages, though, kept climbing, rising 0.9 per cent in the third quarter after a 0.1 per cent increase in the second quarter. This marks four consecutive quarters in which wages have grown faster than productivity.
|1. Why is the Bank of Canada holding interest rates firm? A surge in wages may be the answer. Where Stephen Gordon points out that rapid growth in average hourly compensation might mean that inflation will pick up soon.||2. Labour productivity growth. The Conference Board of Canada explains what productivity is and looks at historical trends, comparing Canada with the U.S. and a number of other countries.|