- Two Leading Economic Indicators Now Confuse as much as Clarify
- An Extraordinary Portrait of the New Homes Market in America’s 12 Largest Cities (Part 2)
- An Extraordinary Portrait of the New Homes Market in America’s 12 Largest Cities (Part 1)
- How Important is Foreign Trade to the U.S. and Canada?
- Who Wins and Who Loses in Today’s Oil Price and Currency Turmoil? (Part 2)
The October Labor Market Data in the U.S. was Exciting; Canada’s Numbers Not So Much11/06/2012 by Alex Carrick
The October labor market report in the U.S. was generally encouraging. While the unemployment rate rose to 7.9% from 7.8%, the total number of jobs increased by 171,000, according to the Bureau of Labor Statistics.
The U.S. unemployment rate increased because more people started looking for work again. That’s a sign of improving confidence in business prospects. The Conference Board’s consumer confidence index also picked up in the latest month.
Since September 2010, a period of 25 months, the U.S. has added 3.9 million net new jobs. That’s an average of nearly 160,000 per month. Over the latest four months, the average increase in employment has been 173,000. The new-hiring momentum appears to be getting stronger.
The initial jobless claims figure has also dropped to an encouraging level, only 363,000 for the week ended October 27th. It’s been an advance indicator for the good employment news.
The U.S. construction sector added 17,000 jobs in October. Manufacturing employment stepped up by 13,000.
The U.S. construction unemployment rate in this latest October was 11.4%, down significantly from 13.7% a year ago. Expect ongoing improvement in the number of construction jobs largely thanks to higher housing starts.
The latest home starts figure was an amazing 873,000 units seasonally adjusted and annualized. Furthermore, residential building permits, which lead starts by a month or two, approached 900,000 units.
U.S. total employment year over year in October was +1.5%. When the economy is chugging along on all cylinders, the year-over-year jobs gain is usually about +2.5%. A couple of sectors were standouts in the latest month: professional and business services, +3.0%; leisure and hospitality, +2.5%; and transportation and warehousing, +2.2%.
In Canada, employment in October stayed flat, but that was after two very strong months, with September at +52,000 and August at +35,000.
The Canadian unemployment rate also remained the same as the month before at 7.4%.
There have been some interesting employment shifts in industry sub-sectors. For example, year-over-year employment in goods production at +3.2% has vastly outpaced job gains in the services sector, +0.8%.
Three sub-sectors within goods production have achieved a year-over-year increase in hiring exceeding +5.0% – utilities, +6.6%; natural resources, +5.9%; and manufacturing, +5.2%.
Included in the “natural resources” designation are forestry, fishing, mining, quarrying and oil and gas. Several of these are important for the construction industry, since they often account for large project launches. It’s good to see that these industries view their prospects in a positive light, as reflected by their strong hiring practices.
Within services, which accounts for 78% of all jobs in Canada, the leading sub-sectors on a year-over-year basis have been: educational services, +6.9%; finance, insurance, real estate and leasing, +3.7%; and information, culture and recreation, +1.9%.
It’s interesting that employment in Canada’s accommodation and food services sector (-3.4%) has been moving in the opposite direction to its counterpart south of the border (+2.5%).
Regionally, the labor markets in Western Canada continued to outperform the rest of the country. The three lowest unemployment rates in the nation were recorded by Alberta (4.5%), Saskatchewan (4.7%) and Manitoba (5.6%).
Saskatchewan also turned in one of the fastest year-over-year employment growth rates in the country in October, +2.3%. But it was beaten for first place by Newfoundland and Labrador (+3.6%).
Newfoundland is increasingly taking advantage of its resources in oil and mining. Unfortunately, due to problems in the fisheries, it still has to contend with an unemployment rate that is alarmingly high, 11.9%.
Quebec’s 7.7% unemployment rate is currently lower than Ontario’s 8.3%. Both provinces are known for their manufacturing sectors. Ontario is geared towards the auto sector while Quebec is focused on aerospace and metals processing.
Quebec (+20,000) far surpassed all other provinces in job creation month over month in October. It seems the recent election of the Parti Quebecois – with both its left-leaning tendencies and its advocacy of separatism – hasn’t disturbed the business community too greatly.
Although it should be noted that all of the total net gain in employment was due to hirings of part-time workers (+23,000).
seasonally adjusted data