Canada's slow economic recovery shows little growth in jobs market

By David Friend (CP)
October 29, 2009

TORONTO — Canada's slow climb out of a recession appears to be doing little to foster growth in the domestic job market so far.

Statistics Canada says the number of non-farm jobs in the country fell by 0.8 per cent in August from July, when it registered an increase. The results were pulled down by a drop in educational services jobs, though a lower number of hirings has been seen in many different sectors.

The agency reported that more than 70 per cent of industries surveyed posted losses, the largest number since last January. Other recent economic reports also question whether Canada's economy is poised for recovery this quarter.

A study by the Canadian Centre for Policy Alternatives says the economy is actually still in a recession, and any expectations of a quick rebound in the private sector are unfounded.

On the upside, a survey from the Ontario Trucking Association shows that 71 per cent of trucking companies in the province who responded believe the Canadian economy has hit bottom.

South of the border, the American economy delivered its best growth in two years during the third quarter, climbing 3.5 per cent, but the momentum was drawn primarily from government subsidies. Consumers spent money on cars and homes with the help of an $8,000 tax credit for first-time home buyers, and a rebate of up to $4,500 to buy new cars.

It remains to be seen whether the U.S. economy will continue to draw growth once the government pulls back on its current financial support system.

Rising unemployment numbers and the tough loan market for both consumers and businesses is adding extra pessimism to the pace of the recovery. The question also remains on whether the U.S. could mount an overall economic recovery without a coincidental improvement in employment.

CIBC economist Avery Shenfeld said the prospect for the U.S. sustaining a jobless recovery is limited.

"We'll need more jobs to power our consumption growth," he said.

"If we're going to have the private sector take over demand at some point we'll need to have job creation to back that up."