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Economy in Brief

Canada Labor Market Sustains Gains; Fares Better than U.S.
by Carol Stone May 7, 2004

Employment in Canada rose by nearly 50,000 in April, rebounding from two monthly declines. The job gain helped push the unemployment rate down 0.2% to 7.3%, the lowest since September 2001. The rate had peaked at 8.0% in December 2001 and again in August 2003. During the 2001 recession, the unemployment rate rose from a low of 6.7%, experiencing a total increase of 1.3 percentage points.

April employment increased most notably in construction, finance, business support services, health care and "other" services. Jobs showed modest rises in manufacturing and several other industries, but declined in wholesale and retail trade and in educational services. The so-called employment rate, employment as a percentage of the population over age 15, rose to 62.5%, maintaining an uptrend that started at the very beginning of 2002.

Canada's labor market has performed better in the last few years than that in the U.S. While it appears that the U.S. is just now breaking out of a disappointingly sluggish employment pattern, jobs in Canada never suffered a protracted decline in the 2001 recession and since then have expanded with some vigor. Correspondingly, the recent unemployment situation in Canada has been "less bad" than in the U.S. While, as noted, the unemployment rate in Canada rose 1.3% during the recession, joblessness in the U.S. surged from 3.9% in early 2000 to a high of 6.3% in June 2003. The rate is higher in the U.S. than in Canada, but it showed much more deterioration during the recession and has since been much later beginning any retreat. This contrasting behavior in the neighboring countries might be seen as an extended payback in the U.S. for its very strong performance in the 1990s, which was not fully shared in Canada. Whatever the explanation, Canada has caught up with the U.S. in its ability to find work for the proportion of the population which desires it.

Canada: Selected Labor Market Indicators Apr 2004 Mar 2004 Year/Year 2003 2002 2001 2000
Employment Change +50K -13K 1.7% 2.2% 2.2% 1.1% 2.6%
Employment Rate 62.5% 62.4% 62.3% 62.4% 61.8% 61.2% 61.4%
Unemployment Rate 7.3% 7.5% 7.6% 7.6% 7.6% 7.2% 6.8%
Labor Force Change +17K +8K 1.3% 2.2% 2.7% 1.5% 1.8%
Participation Rate 67.4% 67.4% 67.5% 67.5% 66.9% 66.0% 65.9%
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