Canadas job gains surprisingly strong, unemployment rate dips

By Richard Blackwell December 7, 2012 The Globe and Mail The Canadian economy created an impressive 59,300 new jobs last month, surprising economists with expansion seemingly at odds with the countrys sluggish overall growth . The employment picture in November was a substantial improvement from October, when the country eked out a meagre 1,800 new jobs. And it is an even better showing than August and September when 34,000 and 52,000 new jobs were created, respectively. Canadas unemployment rate dipped to 7.2 per cent in November, Statistics Canada said Friday, down from 7.4 per cent in October. That rate has gradually declined since peaking in mid-2009, but it has hardly budged for the past several months, and it is still higher than before the recession. Economists had varied widely in their predictions for Novembers jobs picture, although on average they had expected about 7,500 new jobs to be created. And they are still split on the implications of the numbers released Friday. Arlene Kish, senior principal economist sat IHS Global Insight, said the jobs report was great news heading into the holiday season. She noted that most of the new jobs were full time, and many were in professional and technical areas. The good numbers will help boost confidence that has been shaken by global events and help support a decent consumer spending out look for the fourth quarter, she said. On the other hand, economist David Madani of Capital Economics called the numbers too good to be true, given the weak economic growth in Canada -- GDP expanded by a limp 0.6 per cent in the third quarter. Job gains in the coming months will not be anywhere near as strong, Mr. Madani said, especially with the housing sector weakening. The job numbers going forward could also take a hit from some recent mass layoffs. Research in Motion Ltd., for instance, is in the process of cutting thousands of jobs, and Canadian Pacific Railway Ltd. announced 4,500 layoffs on Tuesday. One worrisome trend is the continuing decline in the manufacturing sector, which lost almost 20,000 jobs in November. By contrast, the accommodation and food service sector added 28,000 jobs and there were improvements in retail and wholesale trade, scientific and technical services, and agriculture. Statscan said the number of private sector employees jumped by 48,000 last month, although there wasnt much change in the number of public sector workers or among those who are self employed. The best performing provinces were Ontario, Quebec, Alberta, Manitoba and Prince Edward Island. Indeed in Ontario, there were 32,000 new jobs and and the unemployment rate fell by 0.4 percentage points to 7.9 per cent. The countrys lowest unemployment rate remains in Alberta, at 4.2 per cent, down from 4.5 per cent in October. The biggest employment gains in November were among workers in the 25 to 54 age range, followed by young people aged 15 to 24. Employment among older workers was essentially unchanged, Statscan said. Doug Porter, deputy chief economist at BMO Capital Markets, said the November job numbers were definitely encouraging after a string of dismal economic reports, and they do

suggest there is a lot of resilience in the Canadian economy. But recent productivity figures are still weak, he said, so the overall picture is not one of a particularly robust economy. Mr. Porter also noted that employment statistics are very volatile, and one good month

does not necessarily mean a strong trend. They are just a little to flighty to assume they mean much of anything for the economy, he said.