The latest job numbers for the U.S. and Canada reveal a surprisingly sharp divergence. While the Canadian economy continues to falter, essentially creating no new jobs since last summer, the U.S. economy may well prove it really can rebound without a revival in its key housing sector.
Canadian employment increased by a meagre 2,300 in January, nearly 20,000 below the consensus forecast. It pushed the jobless rate up a tick to 7.6 per cent from 7.5. The lone bright spot was in manufacturing, which actually added 10,100 jobs, driven by better prospects in the automotive sector.
Heavy losses in the professional and scientific ranks and financial services highlight the gloomier economic outlook and ought to give the government pause before it embarks on an ill-timed austerity drive.
By contrast, the U.S. report of an increase in 243,000 non-farm payroll numbers in January blew the roof off best estimates of a 160,000 gain. Even the revisions were positive for a change. The December figure of 200,000 was raised by 3,000, once the stats crunchers got their hands on better survey data.
The strength ran across manufacturing and services. And such key gauges of recovery as the level of underemployment and the average period of being without a job also showed signs of improvement. The jobless rate itself fell to 8.3 per cent from 8.5.
This all has to be good news for the Obama administration, reducing the ammunition for the Republicans seeking to pin the blame on the White House for a lousy job creation record.
It will also add fuel to the Fed hawks opposed to keeping rates at essentially zero. But they may want to have a close look at wages. Average hourly earnings growth remained a tepid 1.9 per cent year over year, not exactly a harbinger of coming inflationary storms.