Well Happy New Year Everyone!!! This is another bit of good news
Canada, U.S. jobs tally shocks economists
Economy: No sign of slowdown
Peter Morton, Financial Post
Published: Saturday, January 06, 2007
WASHINGTON - Stunning jumps in job creation last month on both sides of the border mean the Canadian and U.S. economies are still firing on all cylinders, economists said yesterday.
Canada's unemployment rate hit an unexpected 30-year low of 6.1% in December when 62,000 people found new jobs, bringing annual job creation to 345,000. This is the 14th straight year for new job creation in Canada.
Douglas Porter, deputy chief economist at BMO Capital Markets in Toronto, labelled the 62,000 increase "jaw-dropping" and something not seen since last May, when 96,700 jobs were created north of the border. The increase in jobs in Canada was four times more than economists had predicted.
"To see that resilience over that period of time and these good job numbers today is encouraging," said Jim Flaherty, the Finance Minister. "That is not to say that our economy is not slowing. It has been slowing for a time and that was anticipated in budget 2006, and we watch that closely."
In the U.S., economists were also surprised the economy generated 167,000 new jobs in December even as the housing slump appeared to loom larger.
"This is a much stronger-than expected report with a solid gain in December payrolls, an upward revision to prior months and a well above-trend gain in hourly earnings," said David Greenlaw, an economist at Morgan Stanley & Co. in New York.
The strongest job creation in Canada was in Ontario, where nearly two-thirds of the new jobs were. Over the entire year, Ontario had a job-growth rate of 1.8%, although the increases were largely in the service sector. Ontario has lost 130,000 manufacturing jobs since the fall of 2002.
In Quebec, the unemployment rate hit a 30-year-low of 7.5% last month, while Alberta, still fuelled by the energy boom, saw its best growth rate in 26 years with an increase of 6% over the year.
Saskatchewan, Newfoundland and Labrador and British Columbia had job growth above the national average last year.
The increase in U.S. jobs and a 0.5% increase in the hourly wage meant U.S. workers were in better shape than anticipated. Economists had expected to see a 100,000 increase in new jobs last month.
"This is a good report for the American worker," said Ken Mayland, president of Clear View Economics.
The jump in December came after a 154,000 rise in November that was also larger than estimated. The U.S. unemployment rate remained at 4.5%.
"The economy's in pretty good shape,'' said David Resler, chief economist at Nomura Securities International Inc. in New York. "There is no likelihood of a near term change in monetary policy.''
Like Canada, the largest increase in new American jobs was in the service sector such as banking, insurance and restaurants. Manufacturers cut 12,000 jobs last month after eliminating 20,000 in November. The sector represents about 12% of U.S. economic activity.
For all of 2006, the U.S. unemployment rate dropped to a six year low of 4.6% as the economy added 1.8 million jobs. In 2005, the unemployment rate averaged5.1%. The housing slump prompted builders to eliminate 3,000 jobs after cutting 25,000 positions in the prior month. But warmer-than-normal weather in much of the country may have prompted home builders to continue projects and postpone more layoffs, said Joseph La Vorgna, chief U.S. economist at Deutsche Bank Securities Inc. in New York.
Economists had been becoming increasingly nervous that the American economy could slide into a recession this year, largely because of the slump in housing.
However, the employment statistics seem to indicate the economy, the world's largest, is more resilient than thought. The risk of a recession has now been pegged at 25% after yesterday's economic statistics.
"The data will disappoint those looking for fresh signs of a downturn and set back expectations for an about-face on monetary policy,? said Steven Wieting, managing director of economic and market analysis at Citigroup Global Markets Inc. in New York. "The underlying recovery remains intact.''
The U.S. economy grew at an annual rate of 2% in the third quarter, the slowest rate of 2006.