Friday, March 07, 2008

Jobs, Jobs, Jobs - What's Going On?

Jobs are in the news today, in Canada and in the United States.

The good news is here at home where we added 43,000 more jobs last month, a fivefold increase over the 8,000 forecast. This comes atop 46,400 added in January.

The bad news is in the United States. The Americans lost 63,000 jobs in February, following a loss of 22,000 jobs in January. The New York Times calls it the, "...fastest falloff in the labor market in five years."

“I haven’t seen a job report this recessionary since the last recession,” said Jared Bernstein, an economist at the Economic Policy Institute in Washington. “This is a picture of a labor market becoming clearly infected by the contagion from the rest of the economy.”

So, what's going on in Canada? Are we defying gravity? From the Financial Post:

"Mind boggling," said Derek Burleton, senior economist at Toronto-dominion Bank. "I'm obviously a little shocked right now."
"The last two-months blowout in employment certainly goes against this notion that Canada's economy is really beginning to slow, especially after the Bank of Canada statement earlier this week."

The manufacturing sector, hit hard by the strong Canadian dollar, shed 23,700 workers in February but that was partially offset by job growth in the construction sector. The goods-producing sector lost 12,500 jobs while the services sector gained 55,800."

Nobody seems to be able to account for the disparity between the Canadian and US numbers. With buoyant world grain markets and energy markets, are we better poised to withstand an American recession and, if so, for how long?

Canada's good news would be a lot more welcome if it wasn't for the weakening situation to the south. Now that NAFTA and Rust Belt unemployment have become a prominent issue in the presidential campaign I don't think our job performance is going to be welcome to those who blame NAFTA for their misfortune.


Jay said...

I think the problem is the type of jobs people are getting and the salary/wage. We can have many new jobs but if they are low paying no one is going to be buying a home,car, or on frivolous consumer spending. The loss of manufacturing is a huge loss of salaries. When they say services are they talking about waiters, etc because they don't even get minimum wage here in TO.

The Mound of Sound said...

That's the inevitable problem when manufacturing jobs disappear. The big dollar jobs have certainly increased in the west. The service sector is all well and good but we can't all fetch each other drinks, not that we wouldn't like to.

For all his bigotry and character flaws, Henry Ford had vision. One thing he foresaw was to make an affordable car and to see that his own workers had wages adequate to buy his cars.

I suspect we're going to see a lot of apparent irrationality flow through world economies in the next two decades. We're so tied to our post-WWII economic models and beliefs that the emerging world of resource depletion and economic shifts is going to show the old rules don't work any longer.

But the Americans have shown that you can't build an economy by people selling each other their houses.