Dave Larock in Monday Interest Rate Update, Mortgages and Finance, Home Buying, Toronto Real Estate News Editor's Note: Dave's Monday Morning Interest Rate Update appears on Move Smartly weekly. Check back weekly for analysis that is always ahead of the pack.
The latest Canadian and U.S. employment reports were released last week and both were mixed.
Canadian employment rose by 29,400 jobs, recovering a good chunk of the 46,000 jobs we lost in December. Looking at the longer-term trend, we see that our economy has now created an average of 15,000 new jobs per month over the most recent six months, which is fewer than the 20,000 new jobs per month that we need just to keep pace with our population growth.
Here are the other highlights from the most recent report, with my take on each one:
- Our self-employed ranks increased by 28,300, accounting for almost all of the last month’s gains. Policy makers can be sceptical of job creation fueled by self-employment because it often includes a sub-group of would-be full-time workers who are really just underemployed.
- Private-sector employment fell by 13,600, after falling by 30,200 in December. This is concerning because private-sector job growth forms the backbone of a healthy, growing economy.
- Our economy created 50,500 new full-time positions in January, recovering most of the 56,000 full-time jobs that were lost in December. This reassuring reversal implies that last month’s plunge was a one off, instead of the start of a longer-term downtrend.
- Average hourly wages rose again and are now growing at 2.6% on a year-over-year basis. While that may not sound like much to get excited about, it’s more than double our average inflation rate of 1.2% (as measured by our Consumer Price Index) over the same period. This means that the average Canadian worker has been getting more bang for his/her buck as of late.
U.S employment rose by 113,000 new jobs in January. This is the second month in a row that the U.S. jobs data have disappointed (only 75,000 new U.S. jobs were created in December). While the December report was dismissed by many as a one off that was primarily due to bad weather, the January data were seen as being less influenced by one-off factors. The U.S. labour market has created an average of 175,000 new jobs per month over the most recent six months, which is a little above the 150,000 new jobs per month that the U.S. economy needs to keep pace with the natural expansion of its labour force.
Here are the highlights from the latest U.S. employment data, with my take on each one: