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In April, U.S. Chalks up Great Jobs Growth while Canada Pauses

Alex Carrick
In April, U.S. Chalks up Great Jobs Growth while Canada Pauses

April’s Labor Situation Report from the Bureau of Labor Statistics (BLS) records a month-to-month gain in total U.S. employment of +211,000 jobs and a decline in the unemployment rate to 4.4% from March’s 4.5%.

April’s Labour Force Survey report from Statistics Canada records almost no change (+3,000 jobs) in the number of positions nation-wide north of the border in the latest month, but a drop in the jobless rate to 6.5% from 6.7% in March.

America’s unemployment rate, seasonally adjusted (SA), is now the lowest it has been in almost ten years, dating back to May 2007, which was before the onset of the Great Recession.

Canada’s unemployment rate is the best it’s been since October 2008 (6.2%), although it was almost as tight in January 2015 (6.6%).

Canada’s jobless figure is nearly always higher than its U.S. counterpart because the criterion for measuring who among the out-of-work is trying to acquire a pay-check is a little looser.

In the U.S., the industrial sector accounting for the biggest jump in jobs in April was ‘leisure and hospitality’, +55,000. Staffing in ‘accommodation and food services’ rose by +34,000, driven primarily by hiring at ‘food services and drinking places’, +26,000.

‘Arts, entertainment and recreation’ within ‘leisure and hospitality’ also went on a recruitment binge, +21,000, propelled mainly by the ‘amusements, gambling and recreation’ sub-sector, +14,000.

In second place for employment gains among U.S. industrial sectors was ‘education and health services’, +41,000, with ‘health care and social assistance’ at +37,000. The number of jobs providing ‘social assistance’ was ahead by +17,000. Personnel departments at hospitals, however, stayed mostly on the sidelines, +4,000.

Firms engaged in ‘financial activities’ are finally making up for years in the doldrums. Their payrolls plummeted during the ‘credit crunch’ when the focus was all about big banks passing stress tests and ensuring adequate capitalization. And insurance companies were struggling with money market interest rates that severely restricted their profitability.

In the latest improvement (+19,000) in ‘financial activities’ employment, it has been the insurance carriers that have led the way (+14,000). The total number of jobs in the financial sector has now finally returned to a level matching its peak prior to 2008-09’s Big Dip.

The number of manufacturing jobs in the U.S. in April increased by a modest +6,000. The not-seasonally-adjusted (NSA) unemployment rate in manufacturing, though, is a tiny 3.9%. Twelve months ago, it was 4.5%.

Now we come to construction. Similar to manufacturing, construction had only a minor increase in jobs in April, +5,000. The NSA unemployment rate in construction, while it dropped to 6.3% from 8.4% in March, worsened a tad from April 2016’s 6.0%.

Where U.S. construction did make a significant leap was in year-over-year average weekly earnings by non-supervisory personnel, +3.3%. Average hourly earnings in construction, not including bosses, were +2.5% y/y. The comparable figures for all production and non-supervisory workers in the economy as a whole were +2.6% y/y and +2.3% y/y respectively.

On a percentage-change basis, total employment in the U.S. in April was +1.6%; total services employment was +1.8%; manufacturing jobs were +0.3%; and construction was +2.6%.

Construction at +2.6% is still outpacing all other industrial sectors except for one, ‘professional and business services’ (+3.1%), although it has only a slight lead on another, ‘education and health’ (+2.3%).

The year-over-year numbers on employment in Canada are currently +1.5% for ‘total’; +1.9% for ‘services’; +0.8%, manufacturing; and +1.2% construction.

Perhaps the biggest story in Canada is what has been happening regionally (see Table 1).

Table 1: Canadian Provincial Labour Markets – April 2017
Unemployment rate Employment (000s)
Province APR 2016 APR 2017 APR 2016 APR 2017 Net % change
Newfoundland and Labrador 12.5% 14.0% 237.2 227.4 -9.8 -4.1%
Prince Edward Island 11.5% 10.3% 71.0 73.5 2.5 3.5%
Nova Scotia 8.2% 8.3% 449.1 450.0 0.9 0.2%
New Brunswick 9.6% 8.7% 349.7 351.6 1.9 0.5%
Québec 7.4% 6.6% 4,102.1 4,190.1 88.0 2.1%
Ontario 6.9% 5.8% 6,980.3 7,067.0 86.7 1.2%
Manitoba 6.2% 5.4% 633.1 640.0 6.9 1.1%
Saskatchewan 6.3% 6.2% 566.9 568.2 1.3 0.2%
Alberta 7.4% 7.9% 2,271.6 2,289.0 17.4 0.8%
British Columbia 5.8% 5.5% 2,374.4 2,454.3 79.9 3.4%
Canada 7.1% 6.5% 18,035.3 18,311.0 275.7 1.5%
Data source (seasonally adjusted figures): Statistics Canada.

Table: ConstructConnect.

The nominal increase in total jobs Canada-wide, April 2016 to April 2017, has been +276,000.

Over 90% of that gain has arisen in only three provinces – Quebec, Ontario and British Columbia. Furthermore, the increases have been of an almost equal magnitude: Quebec, +88,000; Ontario, +87,000; and B.C., +80,000.

B.C.’s hike has been most impressive, since the size of its labour force (2.6 million) is considerably smaller than Quebec’s (4.5 million) and much below Ontario’s (7.1 million).

It’s a little concerning that Canada’s year-over-year increase in full-time jobs (+1.3%) has been slower than for part-time endeavors (+2.5%). The former are usually better paying and more stable than the latter.

Also, hiring in the Canadian private sector (+1.3%) has been less vibrant than in the public sector (+2.6%) and it would be more encouraging to see the relationship reversed.

By the way, government hiring in the U.S. in April rose by +17,000, a notable climb. While the states stood still and Washington shed 6,000 positions, local governments ‘beefed up’ by +23,000.

Stock markets have certainly been responding positively to the ongoing improvements in the labor scene. All three major U.S. stock market indices have been ‘rip-roaring’.

Table 2: Stock exchanges – performances of key indices – April 28, 2017
INDEX 52-WEEK LOW 52-WEEK HIGH YEAR AGO

(APR 29, 2016)
MONTH AGO

(MAR 31, 2017)
Latest Month-end Closing Prices

(APR 28, 2017)
PER CENT CHANGE,

LATEST VERSUS
52-WEEK LOW 52-WEEK HIGH YEAR AGO MONTH AGO
Dow Jones Industrials

NYSE (^dji)
Jun 27 16

17,063
Mar 1 17

21,169
17,774 20,663 20,941 22.7% -1.1% 17.8% 1.3%

S & P 500

NYSE (^gspc)

Jun 27 16

1,992
Mar 1 17

2,401
2,065 2,363 2,384 19.7% -0.7% 15.4% 0.9%
NASDAQ

(^ixic)
Jun 27 16

4,574
Apr 28 17

6,074
4,775 5,912 6,048 32.2% -0.4% 26.7% 2.3%
S & P/TSX Composite

TSX (^gsptse)
May 9 16

13,536
Feb 21 17

15,943
13,952 15,548 15,586 15.1% -2.2% 11.7 0.2%
Sources: New York Stock Exchange (NYSE), Standard and Poor›s (S & P), National Association of

Securities Dealers Automated Quotations (NASDAQ), Toronto Stock Exchange (TSE) and Reuters.

Table: ConstructConnect.

As of April 2017’s closing, the Standard & Poor’s index was +19.7% y/y; the Dow Jones Industrials (DJI) index was +22.7%; and NASDAQ, a formidable +32.2% (or ahead by nearly one-third).

In Canada, the Toronto Stock Exchange (TSX) has been a more timid, but decent-enough, +15.1%.

All four U.S. and Canadian indices experienced their most recent trough positions in February 2009. Since then, the DJI is +197%; the S&P 500, +224%; and NASDAQ, a stunningly upbeat +339%. The TSX is the laggard at +92%.

Exponential trend lines have been fitted to the actual index results in accompanying Graphs 1 through 4.

From February 2009 to the present, the annual growth rate for the TSX has been an ‘okay’ +4.4%. But consider how much stronger the results have been for the U.S. indices.

The DJI’s annual growth rate over the past eight-and-a-bit years has been +10.7%; the S&P 500, +12.4%; and NASDAQ, +15.8%.

In this new high-tech/digital/knowledge-based world, the U.S. is at the pinnacle.

Graph 1: S&P/TSX Composite – Toronto Stock Exchange
S&P/TSX
The charts show month-end closing figures. The latest data point is for April 28, 2017
Data sources: New York Stock Exchange (NYSE), Standard and Poor’ s (S & P), National Association of

Securities Dealers Automated Quotations (NASDAQ), Toronto Stock Exchange (TSE) and Reuters.

Chart: ConstructConnect.
Graph 2: New York Stock Exchange – Dow-Jones Industrials (30)
New
The charts show month-end closing figures. The latest data point is for April 28, 2017.
Data sources: New York Stock Exchange (NYSE), Standard and Poor’ s (S & P), National Association of

Securities Dealers Automated Quotations (NASDAQ), Toronto Stock Exchange (TSE) and Reuters.

Chart: ConstructConnect.
Graph 3: New York Stock Exchange – Standard and Poor’s (500)
New
The charts show month-end closing figures. The latest data point is for April 28, 2017.
Data sources: New York Stock Exchange (NYSE), Standard and Poor’ s (S & P), National Association of

Securities Dealers Automated Quotations (NASDAQ), Toronto Stock Exchange (TSE) and Reuters.

Chart: ConstructConnect.
Graph 4: NASDAQ Composite Index
NASDAQ
The charts show month-end closing figures. The latest data point is for April 28, 2017.
Data sources: New York Stock Exchange (NYSE), Standard and Poor’ s (S & P), National Association of

Securities Dealers Automated Quotations (NASDAQ), Toronto Stock Exchange (TSE) and Reuters.

Chart: ConstructConnect.

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