U.S. and Canadian December Labor Market Data
January 6, 2012
The U.S. jobs figures were better than expected, while Canada’s statistics fell a bit shy of forecasts.
U.S. unemployment of 8.5% was down from an upwardly revised 8.7% in November, 9.1% in mid-2011, and 9.4% at the end of 2010. Over the course of 2010, the jobless rate had declined a half-percentage point, or roughly half as much as such fell in 2011. The peak jobless rate associated with the Great Recession, which occurred in October 2009, has been revised lower a number of times and now stands at 10.0% compared to 10.4% reported initially. In the three previous recessions, unemployment peaked at 6.3% in June 2003, 7.8% in June 1992, and 10.8% in November-December 1982. The broadest gauge of unemployment fell 0.4 percentage points to 15.2% last month and is down by 1.2 percentage points over the last three reported months. Only 58.5% of the U.S. population now work.
Canada’s jobless rate peaked in August 2009 at 8.7% but then fell to 7.1% in September 2011. However, December saw such rise for a third straight month, this time by 0.1 percentage points to 7.5%. In the prior business downturn, joblessness hit a double top at 8.0%, initially at end-2001 and again in August and September of 2003.
The U.S. unemployment rate’s decline has outpaced Canada’s in this cycle largely because of people leaving the labor force. U.S. jobs have climbed 1.8% since the jobless rate peaked. In Canada’s case, employment is 3.2% greater now than when the jobless rate peaked. But last year U.S. jobs increased 1.3% from December to December, whereas Canadian employment over that year advanced by a slightly smaller 1.2%. Canada was hit by an elevated exchange rate. Factory employment dropped by 2.8% in Canada.
A 200K increase of U.S. jobs last month was the most since April, but jobs growth in 4Q of 142K per month was not much better than the 3Q pace of 131K.
The U.S. jobs deficit continues to widen. Employment in America rose 2.14% per annum over the last quarter of the twentieth century. In December-over-December terms, jobs climbed 0.8% in 2007, then fell 2.6% in 2008 and 3.8% in 2009. Employment inched back 0.7% in 2010 and increased 1.3% last year. Over those four years, employment declined 0.74% per annum, 2.88% less than the 1975-1999 trend rate. If that trend had been matched since end-2006, the U.S. would now have 152 million workers, not 131.9 million. In fact the jobs deficit is even greater than that gap, because employment from end-1999 to end-2006 averaged only 0.7% per annum as well. The U.S. labor market has been hammered by the technology revolution, which has promoted globalization and rendered the skills of vast numbers of U.S. workers useless in the remaining areas where job needs are actually needed. The jobs deficit, in turn, is a root cause of the fiscal imbalance, and the remedy of austerity will undermine efforts to close the jobs deficit.
Canada and the United States had similar December-over-December rises in average hourly earnings, 2.4% and 2.1%.
Copyright 2012, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
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