Job creation in office:Canada unexpectedly continued to defy gravity in February, as employers added 43,300 net new bodies to their work forces, just under the remarkable 46,400 they added in January and well above last year's average of 31,000 a month.
Even more unexpectedly, perhaps, construction was the biggest sectoral gainer, despite bitter winter weather, while <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com<ST1:place w:st=" /><st1:State w:st="on"><ST1:place w:st="on">Ontario</ST1:place></st1:State>, whose Premier Dalton McGuinty has been engaged in a noisy fight with federal Finance Minister Jim Flaherty over the state of the province's economy, led the provincial job creation stakes.<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com</o:lock><v:shape id=_x0000_i1025 style=" /><O:p></O:p>
The February figure was well above the latest consensus forecast among 21 private sector economists, which, as of Thursday, called for 3,000 net new jobs, according to a Bloomberg News Survey, although their prognostications ranged widely, from a loss of 8,000 jobs to a gain of 20,000.<O:p></O:p>
The jobs performance left the unemployment rate unchanged from the 33-year-low of 5.8 per cent it reached in January, while taking the employment rate to a record high of 63.9 per cent, Statistics Canada said Friday.<O:p></O:p>
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Canadian employers added 43,000 new hires to their work forces in February, just under the striking 46,400 they added in January and well above last year's average of 31,000 a month.
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The Statscan figures for February show that employment gains last month were entirely due to an increase in full-time jobs, for the second straight month, and most of the hiring came in construction in Ontario, with 21,000 net new jobs, along with public administration and professional, scientific and technical services.<O:p></O:p>
Wage growth, too, continued strong in February, with an estimated 4.9 per cent year-over-year increase in average hourly wages, making the seventh consecutive month of gains of 4 per cent or more, Statscan noted.<O:p></O:p>
Economists, who had been expecting job creation to cool dramatically in February, were taken aback by the performance.<O:p></O:p>
“This report is truly a surprise, especially given that the source of strength is <st1:State w:st="on"><ST1:place w:st="on">Ontario</ST1:place></st1:State> and construction,” Douglas Porter, deputy chief economist at BMO Nesbitt Burns, said in a note to clients.<O:p></O:p>
“In a nutshell, the persistent strength in overall employment simply drums home the point — yet again — that the domestic side of <st1:country-region w:st="on"><ST1:place w:st="on">Canada</ST1:place></st1:country-region>'s economy remains incredibly healthy, even in the face of the mounting trauma in export-related sectors.”<O:p></O:p>
Mr. Porter, who had forecast a gain of 12,000 jobs, was particularly struck by the performance of the construction sector. “Given the horrendous weather in the month and clear signs that home-building is losing momentum, the strength must be due to surging non-residential activity,” he said.<O:p></O:p>
CIBC World Markets senior economist Avery Shenfeld, who had been looking for a loss of 3,000 jobs, was less sanguine about the February gains.<O:p></O:p>
“It seems that the slower the Canadian economy grows, the more workers it needs to hire,” he said in a note to clients. “This simply defies logic, and after being stunned this month, we'll simply push of our forecast for weaker job gains into March.”<O:p></O:p>
Official <st1:country-region w:st="on"><ST1:place w:st="on">U.S.</ST1:place></st1:country-region> job numbers for February are due out at 8.30 a.m. (ET), and forecasts range from a low of a net loss of 80,000 to a high of a net gain of 100,000, with the average forecast coming out at plus 14,000.<O:p></O:p>
However, the numbers could turn out to be worse than expected. The private ADP Employment Services employment report released Thursday showed there was an unexpected decline of 23,000 <st1:country-region w:st="on"><ST1:place w:st="on">U.S.</ST1:place></st1:country-region> private sector jobs last month, the first drop in almost five years.<O:p></O:p>
Statscan's report shows that another 24,000 Canadian manufacturing jobs disappeared in February, bringing total losses in the past year to 106,000 or 5.1 per cent and cutting the sector's share of total employment to a record low of 11.6 per cent. At the end of 2002, when the most recent decline began, manufacturing accounted for 15 per cent.<O:p></O:p>
However, over all, the province was the principal driver of the February gains, as large gains in construction, building and related support services and public administration more than offset to bring net gains of 46,200 jobs.<O:p></O:p>
“Suffice it to say, this could somewhat change the dynamic of the Flaherty/McGuinty feud,” Mr. Porter observed.<O:p></O:p>
Quebec gained 3,300 jobs for a 0.1 per cent increase, while in the West, only Saskatchewan registered a gain from January, adding 3,300 new jobs, an increase of 0.7 per cent, although the losses elsewhere were small.<O:p></O:p> |