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Manufacturing loses 39k jobs in august { November 4 2006 } Original Source Link: (May no longer be active)
http://www.canada.com/topics/news/national/story.html?id=e1977ed0-16cc-4899-b4cd-9ebc554ebdb3&k=92492http://www.canada.com/topics/news/national/story.html?id=e1977ed0-16cc-4899-b4cd-9ebc554ebdb3&k=92492
Job gains welcome, but won't cancel slowdown
Jay Bryan
CanWest News Service; Montreal Gazette
Saturday, November 04, 2006
MONTREAL -- For a pair of slumping economies, both Canada and the U.S. showed unexpected signs of strength in October employment numbers made public Friday.
The news is certainly welcome, and the resulting boost to payrolls and incomes in North America could provide a welcome cushion against the serious downturn in consumer spending that several analysts fear as a result of the meltdown in U.S. home values.
But it's too soon to relax. Although the prospect of a mild slowdown is far better than that of a severe one, even the new, brighter picture shows significant strains in both countries' economies.
In the U.S, job growth in recent months suddenly looks much better than it did, not because of any upturn in October, but because the latest report revised the numbers for September and August.
Thus the number of jobs created in recent months is stronger than it was, but the trend for U.S. job growth still seems to be weak. There were just 92,000 new jobs in October, down from the revised 148,000 in September and 230,000 in October.
And this is the aggregate number. CIBC World Markets economist Avery Shenfeld notes that ``business cycles are led by cyclical industries, and there the evidence is not as encouraging.'' Two traditional cyclical leaders, construction and manufacturing, are suffering, with factory jobs down by 39,000 and construction off by 26,000.
Canada's picture is similar, with one big, welcome exception.
We don't have a real-estate meltdown, with its heavy baggage of lost construction jobs and discouraged homeowners who tighten their belts as they realize they're not as wealthy as they had thought.
Indeed, job growth in Canadian construction revived last month after several months of hibernation. The biggest jump was in Alberta, but several other provinces also showed gains. A few service industries also produced modest amounts of new employment.
Factories, however, cut 15,400 jobs, continuing a decline that could well intensify if, as expected, demand from our all-important U.S. market weakens over the coming months.
So what really explains Canada's surge of 50,500 new jobs last month?
Two things. Geographically, it's Canada's oil patch, centred in Alberta, with significant related growth in neighbouring British Columbia and Saskatchewan. Together, these provinces produced 38,900 jobs.
Sectorally, it's the public sector, where employment grew at more than double the pace of private-sector jobs. The big gainers were in civil service administrative jobs and the education sector, which produced a combined total of more than 35,000 jobs last month.
(The two can't be added to produce 50,500, of course, because some public-sector jobs were in the oil patch and some provinces and sectors actually lost employment.)
The public-sector job gain isn't bad news by any means, but it probably is not sustainable. While government jobs tend to be good full-time, secure and accompanied by benefits they must ultimately be supported by a healthy, taxpaying private sector.
And outside of the oil patch, Canada's private sector seems to be stuck in a weak spell that could last for much of the coming year.
Montreal Gazette
© CanWest News Service 2006
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