Canada’s employment picture lit up with a little pre-holiday brightness Friday, with a glowing jobs number that could set the scene for a strong year-end and start to 2013.
An impressive 59,300 new jobs were created in November, Statistics Canada reported, surprising economists with expansion seemingly at odds with the country’s sluggish overall growth.
The employment figure was a substantial improvement from October, when the country eked out a meagre 1,800 new positions. And it is an even better showing than August and September when 34,000 and 52,000 new jobs were created. It was also far higher than most economists had expected – their estimates varied widely but averaged out at about 7,500.
“The hefty jump in jobs comes as great news heading into the holiday season,” said Arlene Kish, senior principal economist at IHS Global Insight. “[The jump] is just what was needed to lift spirits.” The good numbers will “help boost confidence that has been shaken by global events and help support a decent consumer spending outlook for the fourth quarter,” she said.
Canada’s unemployment rate also dipped to 7.2 per cent in November, down from 7.4 per cent in October. That rate has gradually declined since peaking in mid-2009, although it has hardly budged for the past several months, and it is still higher than before the recession.
The best performing provinces in November were Ontario and Quebec, where 32,000 and 18,000 new jobs were created, respectively. All provinces, except Newfoundland and Labrador, and British Columbia, saw their unemployment rates fall. The country’s lowest rate remains in Alberta, at 4.2 per cent.
The positive jobs report jibes with a recent survey of executives performed by Workopolis, Canada’s largest online jobs board. Their study suggested that about one-third of companies are planning to hire more staff in 2013, while only 2 per cent are planning cuts. The rest are expecting to maintain current levels of employment.
“For people who are potentially making a New Year’s resolution to look for a new job, these are all really positive signs,” said Tara Talbot, Workopolis’ vice-president of human resources. She said job postings have recently jumped for professional services and health care jobs, as well as positions in retail, skilled trades and information technology.
That reflects what the Statscan numbers show – most of the jobs improvement in November came in the services sector, where 66,000 new jobs were created.
The flip side, however, is a worrying trend in manufacturing, which lost almost 20,000 jobs in November.
And the job numbers going forward could also take a hit from some mass layoffs now in the works. Research In Motion Ltd., for instance, is in the process of cutting thousands of jobs, and Canadian Pacific Railway Ltd. announced a plan for 4,500 job losses on Tuesday, though spread out over a few years.
Doug Porter, deputy chief economist at BMO Nesbitt Burns, said the November numbers were “definitely encouraging” after a string of dismal economic reports, and they do suggest there is a lot of resilience in the Canadian economy. But recent productivity figures are still weak, he said, so the overall picture is not one of a particularly robust economy.
Mr. Porter also noted that employment statistics are very volatile, and one good month does not necessarily mean a strong trend. They are “just a little too flighty to assume they mean much of anything for the economy,” he said in an interview.
Economist David Madani of Capital Economics bluntly described the new job numbers as “too good to be true,” given the weak economic growth in Canada. “Job gains in the coming months will not be anywhere near as strong,” Mr. Madani said, especially with the housing sector weakening.
The impact of the “fiscal cliff” in the United States could also dent hiring. Mel Svendsen, chief executive officer of Standen’s Ltd., a Calgary-based maker of vehicle springs and suspensions for trucks and trailers, said his U.S. customers are delaying spending decisions because of concerns over the American budget impasse. “Until these customers have enough confidence to buy equipment, we will not be hiring,” he said.