This is a third strong monthly jobs report in the past four. That is a surprise given that the economy slowed in 2012 after rebounding the year before; the IMF forecasts less than 2% GDP growth for Canada in 2012, down from 2.4% in 2011. The headwinds buffeting all economies whose exporters are suffering from lower global demand were exacerbated last year by a strong Canadian dollar and lower commodity prices.
Unlike its neighbor to the south, Canada has regained all the jobs it lost as a result of the 2008 global financial crisis, as the chart above shows. In that it was much helped by not having had such a sharp initial plunge in employment and by being able to stave off the start of the losses for longer than in the U.S. Canadian businesses and workers also accepted reduced hours and lower earnings as an alternative to outright lay-offs. Canada has also recovered from the trough of the post-2008 recession at a faster lick than any of the other developed economies, though at historically sub-par rates.
Were Canada to have a labor force on the same scale as the U.S., the country would have been generating upwards of quarter of a million jobs a month across the year, and half a million in recent months. By comparison, the U.S. has been creating an average of 150,000 jobs a month, with December’s number, announced the same day as Canada’s, being 155,000. That is slow and steady progress for the labor market south of the border. The question north of it is, is the frenetic pace of job creation in recent months too good to last. Is the slowing pace of job creation seen towards the end of the year in the U.S. prologue for Canada without a firmer underpinning of economic growth?