There is going to be some disappointment in the latest U.S. job loss figure. The change in total employment between July 2009 and August 2009 was -216,000. The good news is that this was the smallest drop since August of last year. It is also a huge improvement versus January’s horrendous figure of -741,000. The bad news is that it is still a decline. It is further evidence that it will be a grinding process to achieve stability, followed by an improvement, in the U.S. jobs picture. Relief may not come until well into the fall or early winter. Total U.S. job losses since January 2008 now amount to 6.9 million.

Canada has more cause to celebrate. For only the second time in the last ten months, Canada experienced an increase (+27,000) in total employment in August. The beginning of job losses in this recession in Canada occurred in October of last year, much later than in the U.S. Versus then, the current level of total employment is down by 388,000 jobs. This is much less, on a population-proportional basis, than south of the border.

As a consequence, total employment year-over-year in Canada now stands at -1.7%. In the U.S., total employment is -4.3%. Construction employment, while it is negative in Canada at -8.5% year over year, is still less of a drag than in the U.S., where it is -15.1%. There is one count on which Canada should be a little concerned. Full-time employment continues to demonstrate a downward trend. Total employment is only being saved by part-time jobs, which are not as beneficial over the longer-term for the general economy.

One main explanation for Canada’s better performance versus the U.S. is that service sector employment has held up quite well. Service sector jobs in Canada are currently +0.5% year over year, while they are -2.6% south of the border. Both countries have taken body blows to manufacturing jobs − in Canada, -11.7% year over year and in the U.S., an almost identical -12.1%. One figure that illustrates the problem in manufacturing is the -24.2% change in U.S. motor vehicles and parts employment year over year. There will be much greater stability in this figure going forward, now that GM and Chrysler have gone through their major downsizings and new ownership is in place.

Over the past 20 years, the U.S. economy has generated, on average, 120,000 new jobs per month or 1.5 million new jobs per year.

Data Source: U.S. Bureau of Labor Statistics (Department of Labor).
Chart: Reed Construction Data - CanaData.

Canada : Month-to-Month Total Job Creation

Over the past 20 years, the Canadian economy has generated, on average, 17,000 new jobs per month or 200,000 new jobs per year.

Data Source: Household Survey, Statistics Canada/Chart: Reed Construction Data - CanaData.