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Jobs market stalled There are some optimistic signs in today's jobs report from Statistics Canada, but the bottom line is that the labour market has stalled for several months now.
Canada's economy created just a couple of thousand new jobs in January, The Globe and Mail's Tavia Grant reports, and the unemployment rate climbed to 7.6 per cent as more people went looking for work, apparently with little success.
"The patchy job performance in Canada is disappointing and stretches a little beyond the slowing that we have seen in output growth (finally, Canada has its long-awaited productivity improvement!) but doesn't move the needle much in terms of how the Bank of Canada is viewing the economy – sluggish to start the year (average growth of 1.8 per cent expected in the first half of 2012)," said Mark Chandler of RBC Dominion Securities.
"Nevertheless, it will add fuel to the fire regarding the vulnerability of the nation's housing market and a leveraged consumer. Markets will attempt to price in rate cuts though, once again, we are back to the issue of encouraging excessive debt accumulation - the BoC should, and arguably will, stick to its 'steady as she goes' policy."
The ranks of the full-time and the part-time were little changed in January, but buried in the numbers is the fact that the private and public sector added 39,000 jobs while self-employment fell by 37,000. That's a good sign.
Compared to a year earlier, employment in Canada is up by 129,000, the federal agency said, but that masks the fact that it was all front-loaded. When you account for the monthly ups and downs, the labour market has created only about 30,000 jobs since June, noted senior economist Krishen Rangasamy of National Bank, which is "not much" but consistent with slower growth.
What's more, the trend is clear. Some 10,000 jobs have been lost in the past four months.
"One silver lining is that private and public hiring were both up at a healthy pace, with the weakness coming from self-employment (after a prior month gain)," added chief economist Avery Shenfeld of CIBC World Markets.
"Still, the overall trend is one in which unemployment is edging up, reinforcing the very dovish Bank of Canada stance already assumed by markets."
Canada's finance minister, Jim Flaherty, has said he stands ready to act. Perhaps it's time, given that the outlook isn't any brighter, particularly as governments hold the line.
"The lacklustre gains appear likely to continue in the coming months," said Derek Burleton, deputy chief economist at Toronto-Dominion Bank.
"With budget season fast approaching, government hiring is almost certain to gear down significantly while ongoing economic uncertainty keeps hiring in the business community in check. "For the year as a whole, we continue to expect average monthly job gains of about 10,000 per month, more heavily weighted to the second half of the year. At the same time, the jobless rate is expected to hover close to current levels."
- Jobless rate rises to 7.6% in January
- Miles Corak's Economy Lab: Unemployment is actually worse than numbers show
- Brian Milner: Role reversal - all the good news in the U.S.
U.S. jobs numbers strong The United States, in turn, saw a much stronger labour report than expected - exceptional, actually - amid generally better indicators overall of late.
Employment climbed by 243,000 in January, according to the U.S. Labor Department. That's the heftiest number since last April, and almost double what economists had forecast. As well, the government revised earlier data, showing there were actually 60,000 more jobs created in November and December than initially believed.
The unemployment rate dipped to 8.3 per cent, the lowest since February of 2009, from 8.5 per cent in December.
"Job gains were broadly based, with significant strength in cyclical industries like manufacturing, construction and trade," said chief economist Avery Shenfeld of CIBC World Markets.
"Hourly earnings were still on a modest trend, rising 0.2 per cent, and average weekly hours were flat. Still, this is finally a decent report for employment, one that suggests than Q1 growth could be a bit stronger than our 2-per-cent estimate if this trend extends into the balance of the quarter."
These are good signs, but don't forget that America is struggling with a jobs crisis, one that is hopefully, finally, turning. When you factor in people still looking for work, or those employed part-time but want to work full-time, the jobless level remains above 15 per cent, though it, too, is lower.
Caterpillar closing plant Caterpillar Inc. says it's closing the Canadian locomotive plant where employees, locked out since the beginning of the year, refused to take wage cuts.
Caterpillar didn't say when the Electro-Motive Canada operation in London, Ont., will shut down, The Globe and Mail's Greg Keenan reports, but it plans to shift the work to other plants in North and South America. It employs more than 400 in London.
The company locked out the members of the Canadian Auto Workers union after they rejected demands to cut their pay by up to 50 per cent, making the dispute a test case of sorts.
"All facilities within EMC, EMD and Progress Rail Services must achieve competitive costs, quality and operating flexibility to compete and win in the global marketplace, and expectations at the London plant were no different," the company said in a statement.
Imperial approves expansion Canada's Imperial Oil Ltd. has approved a $2-billion expansion to its Cold Lake oil sands operation.
The expansion, dubbed Nabiye, will add 40,000 barrels of bitumen a day when it's under way by late 2014, the company said.
This has been in the works for some time. Imperial got initial regulatory approval in 2004, which were amended in 2010.
"The Nabiye expansion will include development of a new steam generation and bitumen-processing plant, field production pads and associated facilities," the company said. "As with any large and long-life asset, sustaining capital to support the continued operation will be required over the asset life."
Domtar profit slips Canada's Domtar Corp. posted a drop in fourth-quarter profit today, but said its results were good despite the softness in global pulp markets.
Domtar earned $61-million (U.S.) or $1.63 a share in the quarter, down from $3.25-million or $7.59 a year earlier.
"Our pulp earnings were affected by the rapid decline in global pulp prices while earnings from our paper business were impacted by the typical seasonal slowdown of the fourth quarter," said chief executive officer John Williams. "Nevertheless, our fourth quarter results are good results and I am pleased to see the Attends business perform to expectations."
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