Canada Job Gains Continue

Over the last three months, the job market in Canada has been stronger than in the US. In that time frame, Canadian labor force employment has risen 165,800, a substantial 4.3% annual rate of growth. In the US, the comparable household survey employment measure is up at "just" a 2.9% pace. The unemployment rate in Canada has fallen from 8.0% in September to 7.5% last month. Thus, the Canadian job situation is showing a distinct improvement after a sinking spell in the middle of the year.

Among individual industries in November, labor force employment rose the most in manufacturing, 23,700. That key sector had been flat in October; it tends to be fairly erratic from month to month, so more evidence will be needed to conclude that factory employment is actually on a rising path. The trade sector had the second largest increase last month and is distinctive for achieving three successive increases, all of relatively good size. In contrast, earlier increases in health care and finance were not sustained, but information and hospitality sectors turned higher in October and November. Thus, employment patterns are uneven among industries, suggesting some fragility to the job gains.

That said, the majority of the new jobs represent full-time employment. And labor force participation remains high. Indeed, the participation rate has been 67.6% in two of the last three months, the highest ever (preceding high was 67.5% in early 1990). Moreover, the employment rate, at 62.5% several months of this year, is also a record high. Thus, the demographic forces in the labor market suggest it is strong, attracting potential workers and keeping them employed. By comparison, the employment rate in the US was 62.4% last month and has hovered just below that in Canada for much of 2003. This is a rare occurrence over the 28-year history of the Canadian data, which has seen the US rate nearly always higher and in 1996 more than 5 points above the Canadian rate.