Canada – The job market is on a weakening trend

Canadian Prime Minister Stephen Harper may be losing one of his political trump cards — his record on the economy — just when he needs it most.

Canada’s job growth, among the strongest in the industrialized world after the global recession, has slowed by about half one year before the country’s next election, even as U.S. employment accelerates. Harper, who won a majority government in 2011 campaigning on his economic stewardship, now finds his record under attack by the opposition.

“It’s actually quite a fine line that Harper has to tread on the economy,” said Nik Nanos, chairman of Ottawa-based Nanos Research. “If the consistent narrative is that Canada is underperforming, especially compared to our key trading partners, then there is no economic track record to fall back on.”

Harper’s government, which announced last month a 15 percent cut in employer payroll taxes for smaller companies to encourage hiring, is counting on a strengthening U.S. economy to lead to more growth and jobs in Canada. Meanwhile, Harper said his administration may take additional steps to boost the labor market in a fiscal update expected in the coming weeks, or in next year’s budget.

The Conservatives under Harper now trail Justin Trudeau’s Liberals by an average of 7 percentage points, while the largest opposition group, the New Democratic Party under Tom Mulcair, has slipped to third place, according to opinion poll aggregator ThreeHundredEight.com. Both parties have criticized Harper’s payroll tax cut, which the Parliamentary Budget Officer said in an Oct. 9 report would create the equivalent of 800 full-time jobs through 2016.

Weakening Trend

Cabinet ministers such as Finance Minister Joe Oliver routinely cite the more than 1 million net new jobs that have been created since the worst of the 2009 slump, calling it one of the best performances among Group of Seven countries.

That record over the past five years masks a weakening since the start of 2013. Canada’s labor market has added an average of 12,200 jobs per month since the beginning of 2013, even after adding 74,100 jobs in September. That compares with the 22,600 average between August 2009, as the recession was ending, and the end of 2012.

“The Canadian labor market is currently experiencing more weakness than is implied” by a drop in the unemployment rate to a six-year low of 6.8 percent, said Toronto-Dominion Bank senior economist Randall Bartlett. He created a labor market index using 14 variables that shows little improvement from early 2013.

via Harper Walks Fine Line on Canada Jobs as Election Looms – Bloomberg.