For the seventeenth month in a row, the U.S. economy recorded a period-to-period employment gain in February. The uptick was +227,000 jobs, according to the Bureau of Labor Statistics.
The unemployment rate remained unchanged at 8.3%.
In Canada, the total number of jobs in February fell by 3,000, which is considered statistically insignificant. Statistics Canada’s latest labor report begins with the observation that employment was “unchanged” in the month.
However, because more people stopped looking for work, the jobless rate north of the border declined 0.2 percentage points to stand at 7.4%.
Total employment in Canada has been flat since last June. This has implications throughout the economy.
Increases in employment provide the income gains that facilitate more consumer spending. More jobs are also needed to support new home demand.
With a strong housing start figure of 201,100 units seasonally adjusted and annualized in February, the homebuilding sector is clearly forging ahead with projects regardless.
There is a limit to how long this will remain viable. Building more homes while employment is static is not a winning formula. Nor is it good for home prices.
Furthermore, Canada isn’t receiving support for employment from foreign trade. The balance in merchandise trade in January receded again, after improving solidly in December. Goods exports, dropped more than goods imports in the latest month.
In the United States, deterioration in the goods and services trade balance in January was a sign of an improving economy. The U.S. traditionally imports more than it exports.
From early 2007 through mid-2011, Canada consistently recorded a higher year-over-year percentage change in total employment than the U.S.
Since last summer, the advantage has clearly swung over to our American friends.
The total number of jobs in the U.S. in February was +1.5% year over year compared with Canada’s +0.7%.
In services (70% of the total in the U.S. and 80% in Canada), the year-over-year gain was +2.1% in the U.S. and +0.9% here.
In manufacturing, Canadian employment declined 2.3% year over year, while the U.S. recorded a 1.9% increase.
Only in construction among the major employment categories did Canada still come out ahead, +2.1% versus +1.2%.
This implies a too rosy picture for Canadian construction jobs. Employment in the sector has been essentially flat since last March.
The low point for the total number of jobs (129.2 million) in the U.S. occurred in February 2010. The gain in employment since then (to 132.7 million) has been 3.5 million jobs. The majority of the new positions (2.0 million) have come in the past twelve months.
Let’s look at some of the sub-sectors. U.S. “education and health” employment have done nothing but rise, even during the worst of times.
It’s encouraging to note that in the “leisure and hospitality” sector, the number of jobs has returned to its pre-recession peak, which occurred in early 2008.
“Professional and business services” is the only other category in which jobs have risen close to where they were before the recession. This category includes “temporary help wanted” agencies which feasted on the uncertainty early in the recovery.
As for year-over-year percentage changes, the increases have been particularly strong in professional and business services (+3.8%), leisure and hospitality (+2.7%) and transportation and warehousing (+2.1%).
It should also be mentioned that the U.S. manufacturing sector is undergoing its best run in many years. There has been positive growth in year-over-year employment since early in 2010, with the latest change being +1.9%.
There were a couple of periods in the 00s when U.S. manufacturing employment was flat, but throughout the rest of that decade, it was negative and often severely so.
Returning to Canada for closing remarks, Alberta remained the bright spot among the provinces in February. It recorded the largest year-over-year percentage change in employment (+2.8%) and also the lowest unemployment rate (5.0%), although it tied with Saskatchewan on that score.