Both the U.S. and Canada recorded employment gains in December 2010 that were almost exactly on target with their long-term (20-year) records. The U.S. added 103,000 jobs according to the Bureau of Labor Statistics and Canada added 22,000, according to Statistics Canada.
Over the past 20 years, the average monthly gain in employment in the U.S. has been 100,000 jobs. In Canada, with about 11% of the U.S. population, the comparable figure has been +17,000.
The recession-induced decline in employment in the U.S. over the two years from December 2007 to December 2009 was 8.4 million. In the latest 12 months, 1.1 million jobs were restored.
During Canada’s jobs recession from October 2008 to July 2009, slightly more than 400,000 jobs were lost. Since mid-2009, the decline has been more than made up with an employment gain of 463,000 jobs. The December 2010 versus December 2009 change in employment was +369,000.
The unemployment rate in the U.S. dropped 0.4 percentage points in December versus November to stand at 9.4%. Canada’s December unemployment rate stayed steady versus the previous month at 7.6%. The jobless rate in Canada has dipped down to approximately where it was in early 2004. It was only during the economic boom times from mid-2006 through mid-2008 that the unemployment rate was as low as 6.0%. It even dropped to 5.9% on four occasions.
Expectations concerning the December U.S. labor market report were sky-high based on two lead-up indicators. Initial jobless claims dropped to only about 400,000 on average in the two final weeks of last year. These were the best levels going back quite a ways, indicating that employment opportunities have gained traction. Although the numbers are seasonally adjusted, some volatility may remain based on actual working days exclusive of statutory holidays.
Another closely watched data release with respect to the U.S. jobs picture is the monthly National Employment Report issued by Automatic Data Processing Inc. (ADP). The ADP survey press release indicated a December increase in non-farm private sector payrolls of 297,000.
It would be convenient to say that part of the discrepancy between the ADP figure and the government’s report has to do with employment by the public sector. However, according to the Bureau of Labor Statistics, only 10,000 government jobs were shed in the latest month.
This does not alter an important trend, however. U.S. government jobs have declined by 222,000 over the past year. With budgets spilling red ink at the state and municipal levels, further job cuts are likely. In the private sector, most major sub-categories recorded year-over-year employment gains. The two big exceptions were construction (-93,000) and financial activities (-72,000).
The most impressive increases in 2010 occurred in U.S. education and health care (+422,000), professional and business services (+366,000), leisure and hospitality (+240,000), manufacturing (+136,000) and retail trade (+116,000). The professional and business services category includes presently strong temporary help. U.S. services as a whole added 1.2 million jobs in 2010.
Producers in Canada contended with a currency that was close to or at par with the U.S. dollar during much of 2010. For that reason, it is quite impressive that the manufacturing sector added 66,000 jobs in December. This had positive implications for transportation and warehousing as well (+45,000 jobs) and particularly lifted employment levels in Ontario and Quebec.
With respect to year-over-year Canadian employment, the increase was higher in construction (+4.9%) than in manufacturing (+1.8%). It is also worth noting that although the gain in full-time work (+1.9%) was quite solid, it was exceeded by the improvement in part-time positions (+3.4%). Finally, the public sector (+4.2%) hired at a faster pace than the private sector (+1.7%).
For both nations, recent year-over-year employment changes have aligned much better with historical patterns. Canada’s year-over-year total employment change in December was +2.2%. A figure of +2.0% to +2.5% is quite okay in an economy that is performing acceptably.
In the U.S., the year-over-year change in total employment in December 2010 was +0.9%, way better than the -5.0% levels recorded for several months in mid-2009. Furthermore, the important category of services (70% of the total) recorded an even better +1.4% job gain in December.