Although, the government’s top priorities include job creation, economic growth and long term prosperity, yet the bitter things like trade deficit, the manufacturers’ interests to outsource, and the economic recessionary periods are among the woes that can’t be ignored.
Last November’s gain of 21,600 new job opportunities was ridiculous, because the rosy picture turned into a gloomy one just a month later. The ‘December disappointment’ sent many people home.
Loss of 45,900 Canadian jobs cannot be taken lightly, as the unemployment rate jumped to 7.2% from 6.9% just in one month. This alone declared the year 2013 as the weakest one since 2009.
No doubt, the research through Statistics Canada pages shows a fluctuation in the numbers of job losses and gains during the months in question. However, the numbers are bouncing back and forth in the negative or positive territory depending upon various factors.
In November, there was a surprising improvement in manufacturing sector, but loss of jobs occurred in goods producing industries. In December, there was a decline in construction work, agriculture, forestry, service producing sectors-educational services, accommodation and food services.
For the month, Ontario and Alberta led the provinces lower with losses of 39,000 and 12,000 respectively. British Columbia added 13,000 jobs and Newfoundland and Labrador gained 1,900.
By industry, there were 19,000 fewer jobs in educational services, while the other services category, which includes personal care as well as civic and social organizations, lost 15,000. The agriculture sector lost 9,800 and natural resources lost 8,000.
Health care and social assistance were the only areas to experience gains in December as the sector added 22,000 jobs.
Looking from provincial perspective, Alberta recorded the fastest, year over year employment growth with a 3.3 per cent surge and steady gains throughout the year.
The weakness was mostly seen in full-time employment, which dropped 60,000 with a 14,200 increase in part-time employment.
The private employment lost 26,300, while the self-employed lost 37,900.
But, the public employment rose by 18,200.
Based on the trend, the negative growth is likely to be more than reversed in the months ahead back to November rate of 6.9%.
Paul Ferley, Assistant Chief Economist, RBC Economics said, “Our expectation of a near-term reversal of the December employment drop is more consistent with the Bank of Canada just maintaining the current highly stimulative monetary conditions. Our forecast assumes that the overnight rate will be maintained at 1.00% into the second quarter of 2015.”
Whereas, BMO Capital Markets chief economist Doug Porter said, “the ‘dismal jobs data’ will add pressure on the loonie and stoke chatter about the possibility of an interest rate cut by the Bank of Canada.” He suggested, “It will likely take more than one month of disappointing job growth to trigger a rate cut.” "We continue to believe the bank will need to see an extended period of economic underperformance and even lower inflation before they would even consider easing."
On the other hand, Bank of Canada (BoC) governor Stephen Poloz has suggested that the central bank's next policy move is just as likely to be a cut in interest rates as a hike.
By the way: Statistics Canada reported earlier this week that Canada's trade deficit edged higher in November as imports inched up and exports stalled.
In fact, Canadian ‘markets and job’ data is weaker than expected, so is that of the United States which happens to be Canada’s biggest trading partner. The U.S. added only 74,000 jobs in December after averaging 214,000 in the previous four months.
Canada’s Industry Minister James Moore admitted the jobs report was disappointing. He said, "I think if you step back and look at the overall jobs picture, we still have the strongest job record in all the G7." He claims, "The overall picture for the Canadian economy is still very strong.
Furthermore, low, stable and predictable inflation is the basis for a well-functioning economy allowing Canadians to spend and invest with confidence. This means a good monetary policy attracts healthy economy.
Good thing is the BoC plays a vital role cautiously in reversing the negative economic condition to maintain economic balance by offering good stimulative monetary conditions.
When demand is strong, the BoC raises interest rates to cool off the overheated economy.
But, when demand is weak, inflationary pressures are likely to ease. In that case, the bank goes for rate cuts to stimulate the economy. Thus, economics is when demand exceeds the supply, so prices will rise. The bank is here to implement what is necessary to maintain the balance.
As, the stubborn economic hardship is a cause of concern for everyone; appropriate steps must be taken to reverse the looming economic uncertainty to avoid any threat of tough time ahead.
Apart from the actions of BoC, the Canada’s Economic Action Plan (EAP) offers the tools and resources in the form of apprenticeship grants, training programs and the effective job search techniques to all those who qualify. For smarter Canadians, there is a message for struggle to make their livelihood a success story through utilizing the available EAP.