The American job market has beaten Canada’s by the biggest margin in 21 years. Bank of Montreal chief economist Doug Porter said that although jobs in Canada were up one per cent over the past year, the country has recorded job losses in eight of the last 17 months due to the oil price crash.
By contrast, in the US the number of jobs in the private sector has grown by 2.5 per cent over the past year, the fastest rate since the peak of the internet boom in the late 1990s.
Until recently, Canada had the best job market performance among developed nations since the Great Recession of 2008. Canada fared much better than its American neighbor, with the US struggling with the effects of the financial crisis over the past seven years.
According to Porter, the last time the US beat Canada in job market performance was way back in 1994 when the Canadian economy was struggling with a manufacturing and housing slump, as well as mounting public debts. The unemployment rate in Canada at the time was above 10 per cent.
At present, Canada’s unemployment rate stands at 6.8 per cent, significantly higher than the 5.4 per cent recorded in the US. According to Porter, the reason behind the better performance of the US at present is due to its lower starting point after the shock of the 2008 financial crisis. Compared to Canada, the US had three per cent less of its working-age population employed.
The Bank of Montreal says that regardless of the US performance, it has “serious doubts on Canada’s economic outlook”.
Canada’s plan to boost exports to the US to counter the effects of the oil price crash has not yet worked out either. “Export volumes have been down over the past two quarters,” says Porter.
According to the statement released by StatsCan last week, Canada’s economy experienced a 0.6 per cent decline in the first quarter of the year, owing to a similar decline experienced by the US economy. Experts believe that 2015 will see a downward trend, with economic growth predicted at 1.5 per cent.