It was the best of times, said the data. It was the worst of times, said our anxiety-ridden minds.
The data show that Canada has recovered all of the jobs lost during the pandemic. All, and then some. Canada gained 154,000 jobs in November, and the unemployment rate fell for the sixth month in a row, to just 6 per cent. There are now 186,000 more Canadians working than in February of 2020. Statistics Canada’s latest labour-market report, released last Friday, showed more full-time jobs, more part-time jobs and more hours worked. Total hours worked are back to prepandemic levels.
And this isn’t a statistical illusion, with full-time jobs replaced by involuntary and impecunious self-employment. On the contrary, demand from employers is so strong that Canadians have been moving from self-employment to employees at a faster clip than before the pandemic. Since August, the number of employees in Canada has grown by 371,000, including 275,000 in the private sector.
Over the past two years, wages are up by 7.7 per cent. Those in their jobs for less than three months have been the biggest gainers, with an average raise of more than $2 an hour, or 10 per cent.
And what about the she-cession? There isn’t one. Employment among core working-age women, those 25 to 54, rose by 66,000 in November. The percentage of core working-age women who are employed is almost 81 per cent – a full percentage point higher than at the start of the pandemic. That’s the highest level in Canadian history.
There are downsides in all of this – notably labour shortages and the threat of inflation. However, it’s important to recognize that these are, for the most part, side effects of remarkable and somewhat unexpected good news.
After much of the economy was put on ice in early 2020, triggering a contraction sharper and deeper than the Great Recession of 2008-09, the assumption was that climbing out of this crater would take years. Instead, even though the pandemic is still very much around, the pandemic recession isn’t.
After the Second World War, Canada enjoyed a long economic boom, sparked by stimulative policy, the unleashing of idle resources and an explosion of confidence in the future. The past few months have had all of that – minus the exuberant confidence. It may have to do with the fact that, while previous generations got a clear end to their war, we’ve as yet had no equivalent to VE Day. We’re still battling a dangerous and active enemy.
And so, after nearly two years on edge and on guard against an omnipresent virus, our collective psyche remains in a bit of a catastrophizing state. We’re all suffering from pandemic PTSD. Or, given the pandemic isn’t yet post, TSD.
Yet the economic data, however wrong they feel, are right. Despite the pandemic devastating sectors such as travel and tourism, it’s been some time since the overall job market was so favourable to anyone looking for work. Statscan’s latest info shows that demand from employers is pulling record numbers of low-skilled workers – those with a high-school diploma or less – into the labour force.
The United States also has labour shortages, and an even lower official unemployment rate. But unlike Canada, part of the U.S. story is that several million workers have dropped out of the labour force. Last month, Canada had more jobs than in February, 2020; in the U.S., 3.9 million fewer people were working.
A favourite aphorism on Bay and Wall streets is that the stock market “climbs a wall of worry.” Since late March of 2020, worries have been towering – and markets have climbed them. There remain anxieties aplenty, from whether Omicron could re-energize the pandemic and kneecap the economy, to the reverse, namely whether the economy will get so hot that the Bank of Canada will have to slow it by raising interest rates.
Worrying about all that might go wrong is the job of central bankers, governments and editorial writers. But it’s also important to put worries in perspective. The threat of inflation, with too much money chasing too few goods and too many unfilled job openings, is real. It’s also infinitely preferable to its opposite: deflation, a collapse in demand and too many unemployed people chasing too few jobs.
For the economy, December, 2021, is far better than March, 2020. Even if it doesn’t feel that way.
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