Canada's Jobless Rate Falls to 8-Month Low in Jan.
Feb. 5 (Bloomberg) -- "Canada gained almost three times as many jobs as expected in January, led by part-time positions for youth, pushing the unemployment rate down to the lowest since September.Employment rose by 43,000 last month, Statistics Canada said today in Ottawa, and the unemployment rate fell to 8.3%. The median forecast of 22 economists surveyed by Bloomberg was for a 15,000 gain in employment and a jobless rate of 8.5%."
MP: The unemployment rate in Canada has now declined three months in a row, and has decreased in four out of the last five months, reaching the lowest rate in January (8.3%) since April of 2009 (8%).
25 Comments:
In many ways, Canada's economy (population about 35 million) is more similar to Texas's economy (population 25 million) than California's economy (population over 35 million), which may explain it's lower unemployment rate than the U.S.
Also, in the 2000s, the U.S. had a homebuilding boom, record autos sales, an overabundance of imports, etc. to a greater extent than Canada.
Canada's economy picks up steam
Jan 29, 2010
Canada's economy expanded for a third straight month in November, as mining, energy and wholesale trade helped pull the country further out of recession.
Mining, and oil and gas extraction and wholesale trade accounted for about 60 per cent of economic growth in November...Construction rose for a fourth straight month, expanding 1.1 per cent.
Companies continue to have plenty of excess capacity and predicted the economy won't be running at full tilt until the third quarter of 2011, in part because of the effect Canada's strong currency is having on sales to the U.S. and overseas.
Canada's beleaguered manufacturing industry stalled in November after an anemic 0.1-per-cent gain the previous month, retail trade fell 0.8 per cent after at least five months of increases, and the utilities sector contracted by 1.8 per cent as unseasonably warm weather reduced demand for electricity and natural gas heating.
Meanwhile, the U.S. economy grew a more-than-expected 5.7 per cent in the last quarter of 2009...That bodes well for Canadian growth going forward because it suggests demand for exports to the U.S. could pick up sooner than anticipated as America's shell-shocked consumers recover further and spend more.
This is good news, but Europe looks terrible. Does anyone have any thoughts on this?
Anon, some E.U. economies are worse than others:
Alarm spreads over Europe's massive deficits
Feb 07, 2010
BRUSSELS — The swelling public deficits in Portugal, Spain and Greece have plunged the eurozone into the biggest crisis in its 11-year life.
It is a vicious financial circle; the more fears over deficits and debts grow, the harder it becomes for the troubled eurozone nations to borrow money to stay afloat.
One risk is the "free loader" effect, said Patrick Artus, leading economist with Natixis.
That happens when other countries are forced to come to the aid of an ailing eurozone member "to avoid a default risk that would be very dangerous for the euro zone as a whole."
On the other hand if financial markets are not convinced that countries facing problems will be bailed out there will be a rise in risk premiums or worse.
Spain and Portugal are particularly keen not to be tarred with the same brush as Greece, which has debts over 294 billion euros (412 billion dollars) and a 12.7-percent deficit, far beyond EU limits of three percent of output for eurozone members.
They will be wondering how much "contagion" they will suffer from Greece.
I thought the Canadian socialized medicine was supposed to destroy their economy. Yet they have a lower unemployment rate than ours.
The economy of Canada, as noted by others, is resource based and is recovering more quickly like Australia. The economy of the U.S. is consumption based and will recover when consumers can borrow again.
Here is a chart from Marginal Revolution, via Jesse's American Cafe, that shows the increasing difficulty a consumption economy has recovering from down turns: Percent Job Drops and durations since WWII for U.S.
I wonder--does Canada have the stupid minimum-wage laws that USA does? That might explain why youth employment is strong there.
You are leaving the main part of discussion here . Lots and lots of Canadians work in US everyday. Infact Millions of them on TN1 Visa . TN1 is as bad as L1 and B1 which are misused by whole lot of outsourcing companies . The concept of outsourcing and Free Trade are good when all are fair.
But we have countries that cheat .
Titus, They don't have an Obama
Correction: Job Loss and Recovery Duration was from CalculatedRisk and not MarginaRevolution, sorry.
Still love the blog...it always give the positive spin on the economy.
It's also a point of frustration for me.
For week (months?) you have talked about how the 4-week moving average of jobs lost keeps moving down. Now that the last few reports have shown that moving avg coming up, I don't see the reports on it.
Anyway, still love the site.
James
I thought the Canadian socialized medicine was supposed to destroy their economy.
No, a system like Canada's based on excessive taxation and denial of service is just the thing for a strong economy. Of course, avoiding programs that promote housing based on race, ethnicity and socioeconomic status instead of ability to pay may have helped too. I think that you and all your lefty friends should move up there now and take advantage of it. Need money for bus fare?
James:
You must have missed it, I reported on jobless claims Thursday afternoon, the day the report came out, see the CD post here.
Anon.,
Thanks for the thought but we have enough
left wing loons in Canada who fled GWB.
The reason for the success of Canada is not the National Health policy or the perverse incentives created by federal transfer payments but by the provinces of Alberta and until recently Ontario now haplessly mismanaged by a liberal government.
Mark,
One thing I have missed in recent days is any posting on the subject of the IPCC. Given the number of shoes dropping, I am surprized there has been silence on a matter of public policy that could substantially redistribute income on a global scale on the basis of grossly misleading, politically motivated reports invoking the name of "science".
Thanks Mark. I did miss it. I appreciate the honesty.
James
There are many high-skilled or high-paid workers in the U.S. health care, energy, and financial industries. They've been under attack recently, and seem to be hunkered-down, which hasn't been good for employment.
For Anon at 3:14 note that TN1 visas are for those with Bs or higher degrees that show up with a job offer. As I understand it you show the job offer and ID and get the visa. Note that it works both to the Us for Canadians and to Canada for US citizens.
One must assume that at least some of the exploitation that could occur on other visas does not occur on this one, since people involved should be more aware of the true conditions in each country.
There are many high-skilled or high-paid workers in the U.S. health care, energy, and financial industries. They've been under attack recently, and seem to be hunkered-down, which hasn't been good for employment.
Never mind the attack on the IT industry's workers by those who want offshoring. It's gotten to the point where the only honesty to the displaced is when they receive their layoff notice (and no sooner). Any sooner, and they would make some sort of challenge to it.
Seth, why should a business maintain an unnecessary job when it can be offshored and the good imported at a lower price and a higher profit, while limited resources are freed-up to shift into higher skilled-higher paying-higher quality jobs and goods, including in emerging industries?
In the mid-2000s, the U.S. was at full employment, although the U.S. current account deficit reached over 6% of GDP. U.S. living standards rose at a steeper rate, because of offshoring. Foreigners also offshored jobs to the U.S. Why stop or slow globalization, including open markets, free trade, and unrestricted capital flows?
Massive U.S. job losses over the past two years were the result of dollars being drained out of the U.S. economy through current account deficits (when foreigners sold their goods to the private sector and bought government bonds), restrictive monetary policy (keeping the Fed Funds Rate at 5 1/4% too long), contractionary fiscal policy (shrinking budget deficits that reached $162 billion in 2007), allowing Lehman to fail, which froze the credit market, the government spending spree over the past year (rather than refunding households with a large tax cut), which made it harder for households to pay-down debt, and generally poor or failed fiscal policy responses over the past year (including facilitating appropriate skills for displaced workers).
Americans earn money creating, improving, and selling products, while our foreign trading partners produce them cheaply. If quality improvements were measured correctly, U.S. real wages increased, because inflation has been overstated (export-led economies made up in volume what they lost in value, while the U.S. made up in value what it lost in volume). Which would you prefer. A higher wage to buy less or a lower wage to buy more?
Why is it that about every offshoring strategy seems to lie to the displaced until they are unable to object to the measure? Nobody has given me a straight answer in that respect.
Foreigners also offshored jobs to the U.S..
For the 2003 era of offshoring, it was done only as a political reaction. Damage control, if you will.
Secondly, that was used as a way to train non-citizens. Enter Grigsby & Cohen (et al) to make sure US citizens could not get those jobs. What incentive is there to train/hire a citizen when you can use it to culturaly immerse a non-citizen? What incentive is there to do so if the non-citizen can be treated like an indentured servant with none of the protections of citizenship?
Why stop or slow globalization, including open markets, free trade, and unrestricted capital flows?
Right now, it is being used as a weapon against US citizens. That is, it is used as a threat against US citizens who wish to speak up wrt working conditions. Same for the folks on the other end.
If the citizen had the ability to negate that threat as it is presented to them(and not at a time when they are "more skilled"), then I might be more sympathetic to your cause.
As things stand, I only will support such when the citizen can expect the following:
1a) Follow their job, compensation level(in their favor, not the business's) and skill level around the world.
1b) Do so without worry as to any non-economic freedoms being revoked (as done frequently in Third World countries that defer to multinationals)
1c) Be able to work in a country of their choice and not have to fear the use of trade as a threat to speaking up.
1d) Entrepreneurial ability is not required nor is given preference over those whom are averse to it.
1e) Staffing firms are considered a temporary measure, not a permanent end-run.
1f)Citizenship of a First World(as initially defined by NATO) nation is not a penalty.
There are benefits and costs to globalization. A "weapon" is a harsh way to describe it.
Seth,
For your consideration, Matthew Slaughter makes a compelling case.
QT, thanks for the article.
Seth, the question should be how to place those displaced workers. Perhaps, students who want to study fields in demand should receive more federal aid, while students who want to study fields in less demand should receive less student aid.
You say globalization or offshoring is a "weapon," which implies destruction. However, offshoring benefits both trading partners, e.g. through the Law of Comparative Advantage, although one side may "win" more than the other. Hostility towards business is not a solution to help society.
Seth, the question should be how to place those displaced workers. Perhaps, students who want to study fields in demand should receive more federal aid, while students who want to study fields in less demand should receive less student aid.
That's about any hard science or law degree. The issue is that not all are amenable to these higher-skill fields. That would be condemning them to a short and painful future.
You say globalization or offshoring is a "weapon," which implies destruction. However, offshoring benefits both trading partners, e.g. through the Law of Comparative Advantage, although one side may "win" more than the other. Hostility towards business is not a solution to help society.
Consider the idea that business can afford to be a bit more hostile to its employees in order to cut costs. The way that the hostility is justified is to use the threat of offshoring or large numbers of applicants towards the person who raises the issue. That also provides incentives to thwart anything that would block such hostility. Finally, should the bluff be called, it is used against the complainant(s). They are out of a job and may not be able to collect unemployment due to a legal technicality(read: a policy violation will be used to get around any legal roadblocks).
That is what I consider weaponized use of trade. Where it might be mutually beneficial for parties A and B, it can be used against C. For all purposes and intents, C is treated as a roadblock.
There are benefits and costs to globalization. A "weapon" is a harsh way to describe it.
Harsh, but that is how it is used.
Seth, the fact that society has shifted from an agricultural economy into the industrial-information-biotech revolutions prove people are capable of improving their skills, and there are many more economic revolutions to come. Afterall, economies are made up of people.
Normally, cutting costs is not "hostile." In a competitive market, the top priority of business is to survive, and that may require offshoring. If a worker objects to offshoring, why should the entire business be at risk on one objection or the objection of a group of workers?
Globalization is not a "weapon" that destroyed economies. It improved economies substantially.
Seth, also I may add, your example is unrealistic, because the top priority of a business is to survive. If a business doesn't pay a competitive wage, then its top workers will leave, e.g. to a competitor, and the business will fail.
Post a Comment
<< Home