The Greeks may be rioting in the streets, and tumbleweed may be blowing through half-built housing developments in California, but here in Canada we appear to be having a fine old time.
Statistics Canada just released its latest figures on unemployment and they are startlingly good news.
In June, 92,000 jobs were created. This brings unemployment down to 7.9 per cent, the first time the eight per cent barrier has been cracked in about 18 months.
In fact, despite the crisis headlines in the papers, employment is up over 400,000 jobs since July 2009.
That’s right, 400,000 jobs. And most of them were full time.
As northerners, it’s nice to see southern Canadians getting back to work and contributing, as is their national duty, to our transfer payments via their taxes.
The details behind the numbers are also illuminating. The new jobs were concentrated in retail, health care and various service sectors. Manufacturing continued to decline, losing 14,000 jobs in June. Jobs in this sector are still more than 200,000 below where they were.
The big question is whether they will ever return, or if this is part of the long-term shift we have been seeing for decades from manufacturing to services. If this parallels the 19th- and 20th-century shift from agriculture to factory work, these jobs may never return.
In 2009, only two per cent of Canadian workers were in the agriculture sector and just 11 per cent in manufacturing. That’s two per cent growing our food and 11 per cent making our stuff, while the other 87 per cent of us produce “services” like haircuts, management consulting and tantric yoga lessons.
It’s a good thing the two per cent of Canadians with the food don’t gang up on the rest of us.
The modern economy is remarkable, if you think about it. And this trend is even more pronounced in the Yukon, where government policy analysts probably outnumber the number of farmers and nearly all our stuff is imported.
Anyway, back to Statistics Canada and unemployment.
The agency also released updated numbers for the territories, pegging the Yukon’s unemployment rate at 7.8 per cent. There are statistical difficulties measuring unemployment in small places, but the Yukon seems to be doing much better than Nunavut which has a 20 per cent unemployment rate.
Statistics Canada’s good news was backed up by federal deficit numbers.
After expecting a massive deficit of over $50 billion due to crisis-related stimulus spending, it looks like the deficit will turn out to be significantly smaller. The Fiscal Monitor, which releases a preliminary view of the deficit numbers for the last fiscal year, indicates the deficit will likely end up being almost $7 billion less than expected. Better-than-hoped-for economic conditions have limited spending on employment insurance, and tax revenues are better too, by almost $5 billion. A lot of this comes from corporate income taxes, indicating more companies were profitable during the period than initially feared.
Looking forward, the outlook is getting rosier too. The federal Department of Finance publishes a survey of 14 independent economic forecasters.
In March their average forecast for economic growth in 2010 was a healthy 2.6 per cent. In June, they were even more bullish at 3.5 per cent. They had also downgraded their expectations on unemployment significantly in 2010 and 2011.
We can’t guarantee that there won’t be more global bad news, whether that is from a European currency crisis or a Chinese banking implosion, things seem to be on the mend. But things are looking up.
And if the rosier scenarios come to pass, the Yukon will have slipped through the biggest global economic calamity in decades relatively unscathed.
Keith Halliday is a Yukon economist and author of the Aurore of the Yukon series of historical children’s adventure novels.