Labour market reports were released Friday for both Canada and the U.S. and the news could not be better. In Canada, the month-over-month increase in employment was 108,000. South of the border, the April versus March gain was 290,000.
The respective reporting agencies are Statistics Canada and the Bureau of Labor Statistics, U.S. Department of Labor.
These aren’t just good numbers, these are “blow you out of the water” numbers.
In Canada, the average monthly increase in employment over the past 20 years has been 17,000. An increase of 108,000 is more than half of the normal advance in a year.
Canada lost 250,000 jobs during the recession from October 2008 through early fall of last year. Almost half of that drop has been made up in one month.
The increase in part-time employment (+65,000) outpaced full-time work (+44,000). The sectoral leaders were retail and wholesale trade (+32,000), business, building and other support services (+31,000), construction (+24,000) and information culture and recreation (+20,000).
The unemployment rate improved only marginally to 8.1% since the size of the labour force was bumped up by formerly discouraged workers returning to the job hunt.
A similar effect in the U.S. caused that nation’s unemployment rate to climb slightly from 9.7% in March to 9.9% in April. This is understandable, given that the U.S. is still down by nearly 8 million jobs versus its previous peak employment.
Many adults gave up on employment in the trough of the recession and are only now back in the search.
The U.S. 20-year month-to-month average employment gain has been 100,000. By comparison, April’s figure was almost a factor of three.
U.S. manufacturing employment increased by 44,000. The number of construction jobs was up by only a little, 14,000.
It was the private service-providing sector that provided the bulk of the increase, with professional and business services and leisure and hospitality making the largest contributions.
Education and health services (+35,000), and government (+59,000) also made big hiring gains.
Jobs and income growth are crucial to maintaining consumer spending momentum. April’s employment indicators point to strong gross domestic product (GDP) numbers for both countries in 2010.
The Bank of Canada will be feeling more pressure to take action on interest rates. The Federal Reserve, with considerable slack still remaining in labour markets despite April’s strong showing, can be more relaxed about raising rates.
With China, India and Southeast Asia growing strongly and the pickup in economic activity becoming more evident in North America, Europe now needs to “get with the program.” There must be a speedy resolution of the sovereign debt crisis that threatens to spread from Greece to other highly-indebted nations in the region.
For more articles by Alex Carrick on the Canadian and U.S. economies, please see his market insights. Mr. Carrick also has an economics blog. His personal blog is at www.alexcarrick.com
