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Facts catch up to smoke and mirrors

Statistics Canada released its quarterly jobs report today. The underlying story is one of overall weakness in Canada's labour force. The unemployment rate fell three-tenths of a point to 7.6 per cent in November, despite the economy creating only 15,200 new jobs – all part time. Manufacturing jobs tumbled, down 28,600, after being roughly flat this year through to October. Scotia Capital analysts Derek Holt and Gorica Djeric reminded clients this morning that the reported modest decrease in unemployment should be taken with a large grain of salt. Here’s why:

The unemployment rate fell, mostly because the labour force participation rate declined.  44,000 people exited the workforce in November over October so this effect overwhelmed the impact of only 15,200 jobs have been created. 

The biggest drop in labour force participation was focused on young people (-40,400).  Women over 25 also slightly retreated from the workforce (-5,700) and only 2,500 men over 25 entered.  Thus, a drop in labour force participation because people gave up searching is not a positive source of improvement in the jobless rate and may not be sustainable given how volatile the figures can be. 

Full time jobs were down 26,700, while part-time jobs were up 26,700. Thus, a rise in hours worked was weaker than the headline job rise would imply. All of the gains were in the public sector (+21,100) and self employment (5,700).  Private sector jobs fell 11,500. On a sector basis, strength was concentrated services (0.3% m/m, 36.2k). The goods-producing industry posted a decline of 21k.  Nearly half of the sectors (7/16) posted declines, led by manufacturing (-28.6k) and finance (-22.9). The strongest gains were registered in health care & social assistance (28.4k) and trade (26.2k).

These numbers also highlight that “Canada’s Economic Action Plan” has been an outrageous exercise in smoke and mirrors and puts to rest the myth that the Harper Conservatives are competent economic managers. The facts and their track record show that they are clearly not.

Handing out big cheques with the Conservative Party logo on it and the unprecedented spending of billions of hard earned taxpayer dollars on political advertising, polling, signs, outdoor toilets, gazebos, tennis courts, and massive increases in Stephen Harper’s office budget hard has done nothing to create the economy and jobs of the future.

In fact, this flagrant fiscal mismanagement and incompetence has set Canada’s economic prospects back significantly.


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