‘Canada’s moment as an economic standout is over.’

“Canadian employers created barely any jobs in July, surprising forecasters and reinforcing the Bank of Canada’s decision to keep interest rates low.
Statistics Canada’s monthly tally of hiring and firing produced a net gain of 200 positions last month, as a 60,000 increase in part-time jobs marginally outweighed a 59,700 plunge in full-time positions. …
“There is little job growth in Canada and the degree of slack in the labour market remains elevated,” David Watt, chief economist at HSBC’s Canadian unit, advised clients in a note.
Canada’s moment as a standout among the world’s richer economies is over. The country weathered the financial crisis relatively well and gross domestic product and employment rebounded to pre-recession levels faster than most of its peers. Economic growth now is coming much harder. For the better part of the year, Canada has tended to follow monthly gains in hiring with offsetting declines in the weeks that follow. …
The labour participation rate, which measures the percentage of the population either working or seeking work, dropped to 65.9 per cent, the lowest since October 2001. Employment in goods-producing industries has shrunk by 56,000 positions this year, reducing the headcount to its lowest since January 2012, according National Bank Financial. …
Canada’s economy is need of a jolt that just isn’t coming.
The Bank of Canada has signaled its readiness to leave its benchmark lending rate unchanged at 1 per cent for a considerable period, yet it is wary of cutting borrowing costs because that could prompt highly indebted households to take on more credit.”

– from ‘Surprisingly negative jobs report supports low-rate stance’, G&M, 8 Aug 2014

Canada’s housing price bubble has been the result of 12+ years of too-cheap money rather than growth in real economic fundamentals. At some point prices will reconcile with fundamentals. – vreaa

18 responses to “‘Canada’s moment as an economic standout is over.’

  1. I remember when local commenters were calling everyone idiots for wanting the same thing in Canada as was happening in the US, a short 5 years ago.

    The US had a bubble. It had an immensely painful bust, moved on, and is now entering a recovery phase with amazing employment growth, and soon wage growth too. Unemployment is well below the Canadian average, and participation rate is steadily increasing – without hitting the unemployment rate.

    It wasn’t too hard to predict, and in fact was posted on these very boards, that when the US enters recovery Canada will lag behind punished by higher cost of borrowing and record debt levels.

    This is going to unfold exactly like predicted, slow growth, and a missed opportunity in riding the global post recession growth, penalized by record debt at record low borrowing costs.

    Good luck to us.

    • (The US) is now entering a recovery phase with amazing employment growth, and soon wage growth too. Unemployment is well below the Canadian average, and participation rate is steadily increasing

      Except that is simply not true. Yes, the official unemployment rate (as defined by people who want a low number produced) is dropping, but the actual participation rate, which is far more meaningful? No recovery. None. zip, nada. A little seasonal pattern allows an annual “we’ve turned the corner! Now watch the recovery blast off with all the pent-up…” chorus, but in both the US and Canada, the jobs aren’t recovering. There is a trend of gaining part-time and losing full-time, but that’s pretty tough to spin positively so it’s mostly ignored.
      Just google it, it not that hard to find.

      Burt, are you dumb enough to not know such an easily verifiable fact, or are you disingenuous?

      • Right! Thanks for the laugh!

        Ill toss this in the conspiracy files, right under ” Bush brought down the towers.”

        I know what the reality is on the ground, in Canada and US, via friends, family, and business connections.

        There is over a trillion dollars of savings sitting around the world in corporate accounts ready to be deployed – inflation is ready to roar.
        Demographics are favourable, and most importantly sentiment has turned. The US has absolutely turned the corner, for the better.

        As for Canada, we agree there. Dismal employment performance, outside of Alberta the economy is hurting. We lost 60k full time jobs, added 60k part time jobs. Were in for a painful ride down if construction slows.

      • Smell I do, the residuals of the cooking the Burt is performing.

      • CanuckDownUnder

        Here are the official BLS numbers, I certainly don’t see any steadily increasing participation rate. It has been bouncing around the 63% mark for the past year or so but no uptick yet:


        Speaking of dismal job numbers the Australian unemployment rate just hit a 12 year high. Incredibly the government is planning to loosen the rules allowing even more TFWs to flood into the country despite skill shortages being at historic lows and rampant fraud being reported in the program (sound familiar?).

    • Show me a link, with real data showing an increase in the USA labour force participation rate. You started with claiming something that is pretty much the opposite what I believe to be the real situation. If true, I am greatly mistaken which concerns me. So let’s have some back-up for your claims.

      “Amazing job growth” and “participation rate is steadily increasing”

      Saying it doesn’t make it true. I am calling you a liar who who knows better, or an idiot who believes campaign promises. CanuckDownUnder already supplied the link using strong un-manipulated data showing at least one of your assertions is simply not true, and your others can’t be true if the participation rate is still mired in the mud.

      Does someone pay you to post this drivel, Burt?

      And I assure you, if you can show me credible data that hasn’t been manipulated to somehow squeeze input data through 17 pages of intricate mathematics and end up with the number desired by the boss that shows either “Amazing job growth” or “participation rate is steadily increasing”, I will first verify, then both humbly apologize and truly thank you, then change my investments quite dramatically.

      I’m not holding my breath, though.

      • If you wait until the numbers come out before changing your investments, you will have missed the boat. The market is anticipatory and fast-moving.

  2. The US market peaked over 8 years ago. My how time flies.

  3. Burt’s right: the U.S. is simply thriving.

    As in so many areas, Canada has failed to learn from the U.S. housing experience. The bursting of their bubble unfolded before our eyes in technicolor just a few short years ago, and yet Canadians’ smug, “it’s different here” attitude has doomed us to the same fate.

  4. Based on what is it a factual lie and a false statistic? It seems to me Alex, that you are going to take any official statistic as a manipulated lie.
    How am I to then prove to you what the realities are?

    • Because the official US data is cherry-picked and hiding the truth. For example, 280,000 jobs created last quarter sounds great, certainly the sign of a recovering economy, right? But dig deeper and find out that 600,000 full-time jobs were lost and 880,000 part-time jobs were created. How many of us would give up our higher-paying full-time job to work 1.5 lower-paying part-time jobs? Question everything.

  5. And again, what I consider a really official statistic, the bureau of labour statistics, http://data.bls.gov/timeseries/LNS11300000 It is very raw data, the data which the more talked about unemployment rate is based upon, and you led with it. Since you used it as your primary source, I thought you accepted it. Since you stated pretty much the opposite of what it says, I take it take you are a liar. Look at the series! Every month this year is lower than last year, yet you say it is increasing to lead off with.

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