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This article was published 3/12/2011 (2393 days ago), so information in it may no longer be current.
OTTAWA — Canada’s mostly rosy jobs picture in the last two years appears to be darkening as the economy shed workers for the second consecutive month in November and the unemployment rate moved from 7.3 to 7.4 per cent.
Economists had expected a modest pickup of about 17,000 jobs for the month, if only because October’s dip of 54,000 seemed out of proportion with an economy that was growing, albeit slowly.
But instead another net 18,600 workers fell out of the labour pool last month — all due to a big drop in part-time employment that was concentrated in the services sector and in Quebec.
The Manitoba economy shed 6,500 part-time jobs last month. Although it also created 4,700 full-time ones, the net loss of 1,800 positions boosted the number of unemployed workers in the province to 36,100, and drove the provincial unemployment rate up to 5.5 per cent from 5.2 per cent in October.
That’s the third lowest jobless rate in the country after Alberta’s 5.0 per cent and Saskatchewan’s 5.1 per cent.
Statistics Canada noted despite the most recent declines, there were still 212,000 more Canadians and 2,300 more Manitobans working in November than there were at the same point a year ago. That’s a pickup of about 1.2 per cent for the Canadian labour force and 0.4 per cent for the Manitoba labour force.
But all of those gains are old news. November’s loss marks the fifth consecutive month since June in which the economy has failed to create jobs in the aggregate. Employment is down about 10,000 over the period.
"This is now beginning to be a trend," said Derek Burleton, a senior economist with the TD Bank. "It shows businesses are not much in the mood for hiring at the moment. Some of the global uncertainties are starting to weigh on business confidence, and I don’t see much of a change in this trend, at least for the next six months or so."
Union leaders and opposition MPs called on the federal government to become more active in stimulating jobs, warning Ottawa must not assume conditions will improve. They also insisted the Harper government stop slashing public service jobs and reconsider other austerity measures.
In the Commons, Finance Minister Jim Flaherty’s parliamentary secretary, Shelly Glover, appeared to rule out new stimulus spending, saying the government must "stick" with its plan to rein in deficits so it doesn’t go the way of Europe. The minister was in Charlottetown launching his prebudget consultations process.
However, Flaherty has repeatedly said the Conservative government will remain flexible in its economic policies and consider new stimulus spending if the economy needs it.
It is unclear where Canada’s jobs performance will go from here. The U.S. reported a 120,000 employment increase during the same month — good news for Canadian exporters — although the U.S. remains far behind Canada’s jobcreation pace since the recession.
Analysts said while the two-month employment setback is worrying, it does not necessarily augur more losses going forward.
In part, Canada’s labour market is paying back for strong growth in the first half of the year that was out of proportion to the increase in output, CIBC chief economist Avery Shenfeld said.
There are reasons to expect modest growth, said David Madani of Capital Economics, including recent better news coming out of the U.S., Canada’s largest trading partner.
But few expect strong employment to resume soon.
Government hiring, which stabilized the market during the recession and early stages of the recovery, is set to fall significantly as governments seek to bring down deficits. Export-oriented jobs don’t look promising given the fearful global situation, and there isn’t much action in the service sector given low confidence measures, noted Burleton.
"Add it all up, and the hiring struggles are likely to extend well into 2012," he said, with the unemployment rate drifting to the 7.5 to eight per cent range in the next six months.
The decline in jobs appears to dovetail with the collapse in business and consumer confidence that began in late July amid a sustained equity market selloff on worrying trends in Europe’s sovereign debt crisis and political gridlock in the U.S. that led to a downgrade of the country’s credit rating.
The Bank of Canada and other forecasters warn Canada faces at best sluggish economic activity in the fourth quarter of 2011 and the early months of 2012 — and worse outcomes should Europe’s troubles trigger a global financial crisis.
In an outlook released Friday, BMO Economics reaffirmed that despite a recent rebound, "Canadian growth still faces ample headwinds in the year ahead, including the financial market turmoil emanating from Europe’s debt crisis, stillmodest U.S. economic growth, cooling emerging market demand and downbeat consumer and business confidence."
The bank’s economic research wing said it believes a rebound to 3.5 per cent annualized GDP growth in the third quarter will result in 2.3 per cent growth for the year, cooling to two per cent growth for 2012.
Not all the details in November’s employment report were negative. Full-time employment actually rose by 34,600, more than offset by the 53,300 dip in part-time work.
— The Canadian Press, with files from Murray McNeill