Here’s a ba humbug statistic heading into the holiday season: Employment growth in Canada is at its slowest pace (excluding the recession) in more than a decade.
While 6.9 per cent unemployment is better than earlier this year, only 148,000 jobs have been created between January and November, “the weakest in a non-recession years since 2001,” according to BMO economist Benjamin Reitzes.
He notes employment is up only 1 per cent in November compared to the same time last year, and called the creation of 21,600 jobs last month “unspectacular.”
“This is hardly the stuff of a firm underlying economy,” says Reitzes.
United Steelworkers economist Erin Weir points out that most of the jobs created last month were part time or self-employed Canadians.
“The longer-term trend is still that Canadian employers are creating barely enough jobs to keep pace with population growth,” says Weir.
The pair of comments come amid other cloudy forecasts for the Canadian economy.
The Bank of Canada recently pared back its economic growth forecast for this year and next and has stopped talking about hiking the benchmark interest rate, which has been stuck at the same level since September 2010. Instead, it’s taking a wait-and-see approach and some economist say rates could fall further.
That pessimistic view comes despite the latest gross domestic product figures showing Canada’s economy grew at the fastest pace in two years in the third quarter.
While the numbers were seen as encouraging, economists caution the pickup was expected after weak summer, which included the Alberta floods and a construction strike in Quebec.
Still, there are two ways of looking at Canada’s economic growth these days. On one hand, economists see steady improvements, driven in part by a recovering U.S. economy. Others point to lower consumer and business confidence that could curb spending.
TD Bank recently described corporate Canada as being “in a slump,” posting less profit over the past year and a half, which is weighing on economic growth and job creation across the country.
A recent report from Ernst & Young says corporate Canada is also more cautious about doing mergers and acquisitions in today’s economy than its counterparts in the U.S.
It says Canadian companies “seem to be waiting for more favourable economic conditions, for the right deal or, in some cases, for someone else to make the first move.”
However, economists at the Conference Board of Canada are more optimistic about the country’s economic growth, with forecasts above the Bank of Canada.
In a recent report, the Conference Board forecast 2.4 per cent economic growth in 2014 and 2.6 per cent in 2014, up from 1.8 per cent in 2013. That compares to the Bank of Canada’s predictions of 1.6 per cent this year and 2.3 per cent in 2014, which were lowered this summer from previous forecasts of 1.8 per cent and 2.7 per cent.
“Better times are in store over the next two years,” the Conference Board said, citing improved outlooks in the U.S. and the global economy.
This kind of mixed view won’t do much for job creation. People looking for a new job will likely latch on to the more positive take on Canada’s economy, while those holding jobs they don’t like could use the pessimistic view as an excuse to stay put, for now. The rest is up to Canada’s employers.