Statistics Canada has released its latest Labour force survey for the month of January. It shows that unemployment has fallen to 7.0 % but there are 21,900 fewer people employed and the fall in the headline rate is due to more discouraged workers dropping out of the labour force. Employment fell from December 2012 by 30.9 thousand in education; 21.6 thousand in manufacturing; 11.3 thousand in the utilities sector; 10.3 thousand in real estate and finance; and 8 thousand in health care.
Unemployment remains elevated in the Atlantic region, Ontario and Quebec, 7.7 % and 7.1 % respectively. It is much lower in Manitoba , Saskatchewan and Alberta where the participation rates are also substantially higher. The national participation rate is around 66 % but the rate is 65.4 % in Quebec, 66.3 % in Ontario, 69.6 % in Manitoba where unemployment is 5.0%; 70.2 % in Saskatchewan where unemployment is 4.0 % and 72.9 % in Alberta where the unemployment rate is 4.5 %. The participation rate is 64.0 % in B.C. where the headline unemployment rate is 6.3 %.
We shall see if this falling off in employment continues or is simply a temporary set back in next month’s report. But it is clearly no time for austerity budgeting.
I am Professor of political economy at Concordia university in Montréal, Québec, Canada. I received my B.A.Hons (econ.&poli sci) from the University of Manitoba. I also completed my M.A. degree in economics there. Went on to spend two years at the London School of Economics as a Ph.D. student in economics and then completed my Ph.D. in political economy at the University of Toronto. Was named a John W.Dafoe fellow, a CMHC fellow and a Canada Council fellow. I also was named a Woodrow Wilson fellow in 1968 after completing my first class honours undergraduate degree. Worked as an economist in the area of education, labour economics and as the senior economist with the Manitoba Housing and Renewal Corporation for the Government of Manitoba from 1972 to 1978. I also have worked as an economic consultant for MDT socio-economic consultants and have been consulted on urban planning, health policy, linguistic duality and public sector finance questions by the governments of Manitoba, Saskatchewan,the cities of Regina and Saskatoon, Ontario and the Federal government of Canada. I have also been consulted by senior leaders of the British Labour party, MPs from the Progressive Conservative party, the Liberal party and the New Democrats on economic policy questions. Members of the Government of France under the Presidency of Francois Mitterand discussed my work on public sector deficits. I have also run for elected office at the municipal level. I first began to write about quantitative easing as a useful policy option during the early 1980s.
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Should Canada follow Japan in inflation targeting then? Last time I check Canada’s inflation was 0.8%. The employment number may suggest an overvalued CAD. A larger question would be, can the major players in the world all have a round of currency depreciation and what would be the result of it?
It seems to me at this point, fiscal policy is the answer while further monetary policy could bring political instability to the world.