There was some welcome news on the U.S. unemployment front this morning as the U.S.Bureau of Labour Statistics released the latest unemployment data for the previous month.
Unemployment fell from 8.5 % to 8.3 % .
Since January of 2011 the unemployment rate in the U.S. has fallen from 9.1 to 8.3 %. There were a total of 257,000 new jobs created in the private sector last month somewhat higher than analysts had expected. But because of state and local government cuts the net new addition to the employed labour force was smaller at 243,000. Had a second stimulus been approved by Congress that targeted helping the state and local governments maintain employment as should be the case in a proper co-ordinated stimulus the results in terms of lowering the unemployment rate would have been even better.
In almost every recovery since the stagflation crisis in the 1970s analysts have been overly pessimistic about the strength of the recovery. This time is no different. The reduction in the headline rate to 8.3 % is a clear sign of a slow but steady recovery. Unemployment needs to be much lower but at least the data is heading in the right direction.
There is a very good possiblity but no certainty that the rate will be close to 7 % or even below 7 % by next 5November. U6 the rate which is the broader measure of unemployment including marginally attached workers,discouraged workers and those working part-time when they would rather work full time remains elevated at 15.1 %, although it too has fallen by 1 percentage point since January 2011.
Unfortunately in Canada the news was less positive. Statistics Canada released its latest report on the labour force showing that for the month of January, 2012 unemployment rose slightly to 7.6% It dropped in Quebec to 8.4 from 8.7 % with the participation rate steady at 64.7 % but in the industrial and demographic heartland of Ontario the rate rose from 7.7 to 8.1 %. the participation rate was 66.7 %. Unemployment in the western provinces remained low except for B.C. where it was 6.9 % but with a low participation rate of 60.3 %. In Manitoba the rate was 5.4 % participation 69.1%; Saskatchewan unemployment 5.0 % participation 69.2 % and Alberta, unemployment the lowest in the country at 4.9 % and the highest participation rate of 74.1 %.
The Canadian government seemed poised to announce a series of austerity measures but with the unemployment rate now rising in Ontario it would be well advised to reconsider.