Mark Carney can't push on a string. And he knows it.
His now famous comment labelling the stockpiles of retained earnings held by Canadian firms as "dead money," while perhaps being the most memorable quote of 2012, must also have been made out of a certain frustration that even this superstar central banker faces limits in his powers to push, encourage, and otherwise jump start business investment.
The Governor knows that the flip side of dead money is insecurity in the jobs market.
While it is certainly true that the Canadian economy has more than recovered the job losses experienced during the recession, on its own this is a weak marker of prosperity and recovery.
Today's release of the employment numbers for December by Statistics Canada complete the picture for the year that was.
They are consistent with the view that many firms face fundamental uncertainty about future profitability, and in response hold back investment. The complement to stockpiles of cash is anemic job growth, tentative hires, and insecure jobs.
Employment peaked in 2008 at 17.1 million, dropped by more than 200,000 in the following year only to recover in 2010 and surpass the pre-recession high and reaching 17.3 million in 2011, and fuelled by another 200,000 in 2012.
Compared to Greece, Spain, and the United States, this is a story of robust growth. But Canadians live in Canada, and the working age population has been steadily increasing. This has left the fraction of the population without a job still below its pre-recession high, and virtually unchanged since 2009.
While Mr. Carney may not be able to push on a string, Jim Flaherty can certainly pull it. But it is clear that deficit reduction is now a priority, and that Canadians cannot count on public sector job growth.
The heavy lifting is going to have to be done by the private sector. Employment growth in the public sector has distinctly slowed, amounting to only 1 per cent in 2012, down from 2.8 per cent during 2010. It has now been outpaced by the private sector for two consecutive years. But even so private sector employment grew by only 1.5 per cent, compared to almost 2 per cent in 2011 and still a far cry from about the 2.5 per cent growth rates before 2008.
One important bright spot in this picture is that 2012 may mark a turning point in the number of permanent jobs created.
Statistics Canada defines a temporary job as having a predetermined end date, or is slated to end when a specific project is completed. These numbers are dominated by term or contract jobs, but they also include seasonal jobs.
About 218,000 more Canadians were employed in 2011 than in 2008, but the number of permanent jobs was actually 50,000 lower, falling to 12.6 million. All the increase in employment between these years reflected a small increase in the number of self-employed, 47,000, and substantial growth in temporary employment, which rose 222,000.
What growth in employment that occurred reflected more precarious jobs, not offering the kind of security Canadians were accustomed to before the recession.
But during 2012 the increase in employment was virtually all in permanent jobs.
The downside of this is that all these jobs are going to older workers, as if business were expressing confidence only in their core workers. Newcomers and the young are continuing to be shut out of the labour market.
There has been very little growth in the employment of 15 to 24-year-olds since 2008, to say nothing of the employment rate of this population. Virtually all of the jobs that have been created have been temporary jobs; permanent jobs have not recovered from the substantial drop during the recession and are now at level not seen since 2002.
Miles Corak is a professor of economics with the Graduate School of Public and International Affairs at the University of Ottawa. You can follow him @MilesCorak, or read his blog at milescorak.com.