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Canadas job gains surprisingly strong, unemployment rate

dipsBy Richard Blackwell

December 7, 2012 The Globe and Mail

The Canadian economy created an impressive

59,300 new jobs last month, surprising

economists with expansion seemingly at oddswith the countrys sluggish overall growth .

The employment picture in November was a

substantial improvement from October, when

the country eked out a meagre 1,800 new jobs.And it is an even better showing than August

and September when 34,000 and 52,000 new

jobs were created, respectively.

Canadas unemployment rate dipped to 7.2 percent in November, Statistics Canada said Fri-

day, down from 7.4 per cent in October. That

rate has gradually declined since peaking inmid-2009, but it has hardly budged for the

past several months, and it is still higher than

before the recession.

Economists had varied widely in their predic-tions for Novembers jobs picture, although on

average they had expected about 7,500 new

jobs to be created. And they are still split onthe implications of the numbers released Fri-

day.

Arlene Kish, senior principal economist satIHS Global Insight, said the jobs report was

great news heading into the holiday season.

She noted that most of the new jobs were fulltime, and many were in professional and tech-

nical areas. The good numbers will help

boost confidence that has been shaken byglobal events and help support a decent con-

sumer spending out look for the fourth quar-ter, she said.

On the other hand, economist David Madaniof Capital Economics called the numbers too

good to be true, given the weak economic

growth in Canada -- GDP expanded by a limp

0.6 per cent in the third quarter. Job gains in

the coming months will not be anywhere near

as strong, Mr. Madani said, especially with

the housing sector weakening.

The job numbers going forward could also

take a hit from some recent mass layoffs. Re-

search in Motion Ltd., for instance, is in the

process of cutting thousands of jobs, and Ca-nadian Pacific Railway Ltd. announced 4,500

layoffs on Tuesday.

One worrisome trend is the continuing decline

in the manufacturing sector, which lost almost20,000 jobs in November. By contrast, the ac-

commodation and food service sector added

28,000 jobs and there were improvements inretail and wholesale trade, scientific and tech-

nical services, and agriculture.

Statscan said the number of private sector em-

ployees jumped by 48,000 last month, al-though there wasnt much change in the num-

ber of public sector workers or among those

who are self employed.The best performing provinces were Ontario,

Quebec, Alberta, Manitoba and Prince Edward

Island. Indeed in Ontario, there were 32,000new jobs and and the unemployment rate fell

by 0.4 percentage points to 7.9 per cent. The

countrys lowest unemployment rate remainsin Alberta, at 4.2 per cent, down from 4.5 per

cent in October.

The biggest employment gains in November

were among workers in the 25 to 54 agerange, followed by young people aged 15 to

24. Employment among older workers was

essentially unchanged, Statscan said.

Doug Porter, deputy chief economist at BMOCapital Markets, said the November job num-

bers were definitely encouraging after a

string of dismal economic reports, and they do

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suggest there is a lot of resilience in the Cana-

dian economy. But recent productivity figuresare still weak, he said, so the overall picture is

not one of a particularly robust economy.

Mr. Porter also noted that employment statis-

tics are very volatile, and one good month

does not necessarily mean a strong trend.

They are just a little to flighty to assume theymean much of anything for the economy, he

said.