Despite mortgage rule changes, despite a housing market that seems to stymie the analysts, despite headlines that continue to volley back and forth between housing crashes and housing growth, and despite recent reports of increased household indebtedness, the recent jobs report should give anxious Canadians something to smile about.
There is no doubt the Canadian economy is resilient. The country has weathered a few storms in recent years, but still chugs on -- somewhat flat at times, but never stagnant. The economy continues to grow, despite a weak dollar. The housing market hasn't busted up despite warnings of bubbles. The GDP is growing, the rate of inflation has moderated and interest rates are low.
One of the main indicators that point to a continued healthy economy is the job numbers. Without jobs, household budgets get tighter, consumer purchases slow down, manufacturers scramble to reduce inventory, which could lead to lay-offs, and bankruptcies rise. Job loss is also the leading cause of mortgage default.
On June 8, Statistics Canada reported that the economy added 55,000 jobs in May, a greater number than was originally anticipated -- economists were expecting 15,000. The other good news was those were private sector, full-time jobs.
This means that Canada's economy has added 317,000 jobs in the past year, which is the strongest 12-month showing since 2013. And each province added jobs.
The manufacturing sector added 25,000 new jobs, a positive number for a sector that was underperforming. However, we still don't know what the fallout will be when NAFTA negotiations begin. The US president continues to talk tough on renegotiating NAFTA, but with the Canadian government working diligently with other countries to strengthen trade ties, we can only hope that whatever happens to NAFTA will be positive for Canada.
While these are good numbers and show a healthy, growing economy, jobs in information, culture and recreation were down as were jobs in finance, insurance and real estate.
The real downside was the growth in wages, which have only gone up by one per cent over the past year. If the economy continues to strengthen, then wage increases will most likely follow.
The bottom line: Using these jobs numbers as a good first sign, hopefully we can look forward to a healthier economy over the next few years.
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