It’s no secret that the quantity of new Canadian jobs has stalled in recent months. But maybe we should be more worried that the quality is eroding, too.
Statistics Canada this week issued its Survey on Employment, Payrolls and Hours (SEPH) showing that Canada’s nonfarm payrolls shrunk by 11,900 jobs in February, after a 3,000-job decline in January. On a year-over-year basis, payroll employment was up 132,000 – but for the past six months, jobs have increased on average by a measly 1,300 a month.
Meanwhile, employment in two of the highest-paying job sectors, utilities ($1,748 a week) and management ($1,403), actually declined in the past year. Another above-average-paying segment, the huge manufacturing sector ($1,003), also contracted – removing 15,000 jobs from the country’s totals by itself.
The upshot is that Canada’s job creation can no longer be assumed to provide as much fuel for consumer spending as we saw in earlier stages of the recovery. Mr. Madani predicts that household income growth in the first quarter may be less than half the pace seen in the fourth quarter, and well below the levels seen routinely through 2012.
When you consider that household consumption was responsible for the bulk of Canada’s gross domestic product growth both in the fourth quarter and in 2013 as a whole, it’s easy to see why there’s lingering concern about the underlying momentum of the Canadian economy. And why the country’s policy makers keep insisting that we need other segments of the economy – such as exports and business investment – to step in and pick up the slack.
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