These are stories Report on Business is following Friday, July 11, 2014.
What to look for
Investors will be watching this morning for how many jobs were won or lost in Canada last month, and whether the unemployment rate climbed or eased.
But a key measure to watch in Statistics Canada’s jobs report, says Bank of Montreal’s chief is economist, is the employment-to-population ratio.
That, said Douglas Porter, has been “drifting lower in Canada, not what one would expect in a healthy economy.”
That measure – the number of people working as a percentage of the adult population – is now down to 61.5 per cent.
Worrisome is that it’s down from 62.1 per cent at the end of 2012 and, even more troubling, just slightly ahead of where it stood at the end of the recession.
“It means that the adult population has been growing faster than the number of people with jobs,” Mr. Porter said in an interview.
In a research note, the BMO economist said part of the decline could be because baby boomers are retiring.
But “even the employment rate for those 15-64 has slipped four ticks in the past year (though it is up 1 percentage point from five years ago,” he said.
The Canadian measure compares to 59 per cent in the United States, still below ours but, Mr. Porter said, its highest in almost five years.
Canada’s labour market, which rebounded far faster than those of other countries, has been tepid over the past year, with just 86,000 jobs created, all of them part-time. That’s a gain of just 0.5 per cent.
And in June, the unemployment rate inched up to 7 per cent, with some 1.3 million people out of work.
As The Globe and Mail’s Tavia Grant reports, economists are hoping for something better when Statistics Canada releases its report at 8:30 a.m. ET.
Forecasting jobs is always a crap shoot, but observers expect to see June job creation of about 21,000, with the unemployment rate holding at 7 per cent, or possibly edging down to 6.9 per cent.
- Tavia Grant: Economists see grounds for optimism when Canada’s jobs data unveiled
- Canadian jobs picture to remain ugly everywhere east of Manitoba: TD
Global markets are recovering from yesterday’s losses as investor angst gives way to calm.
“U.S. markets look set for a positive open heading into the weekend after yesterday’s sharp declines as sentiment stabilises at the end of a fairly turbulent week, as concerns about high valuations and a slowing economic outlook weigh on investors as earnings season gets into full swing,” said chief analyst Michael Hewson of CMC Markets.
Tokyo’s Nikkei lost 0.3 per cent, while Hong Kong’s Hang Seng was down just slightly.
But European stocks, hit hard yesterday by the troubles of a Portuguese bank, are largely on the mend.
London’s FTSE 100 and the Paris CAC 40 were up by between 0.2 per cent and 0.4 per cent by about 7:15 a.m. ET, while Germany's DAX was up marginally.
Dow Jones industrial average and S&P 500 futures were also up.
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