The labour market: Up north, down south

Geoff Bowlby and Jeannine Usalcas

• While the U.S. went into official recession in 2001, Canada showed only one quarter during which its economy shrank. Not since 1974 has the economy grown in Canada while contracting in the U.S.
• While the U.S. economy shrank during the first three quarters of 2001, employment contracted every month of the year, dropping 1.1%. During the same period in Canada, the number of employees increased, albeit a scant 0.9%.
• In 2002, the divergent employment trends were more dramatic-a rise of 2.3% in Canada during the first seven months versus a drop of 0.1% in the United States.
• Not only were Canadian trends more positive, the state of the labour market in 2002 was also better. The proportion of the Canadian population working shot above 62% while it tumbled in the U.S., essentially eliminating the persistent gap in the employment rate. A gap remains in the unemployment rate, but the rate in Canada is higher only because Canadians are now more likely to be participating in the labour market.
• By July 2002, youths (16 to 24) and core-age workers (25 to 54) were more likely to be employed in Canada. Older workers (55 and over) continued to have a higher employment rate in the United States.
• Manufacturers in the United States continued to shed jobs through the first seven months of 2002 (-1.9%), whereas manufacturing employment in Canada rebounded sharply (+2.7%). By July, Canadian manufacturing shipments were 8.2% higher than at the start of the year, compared with U.S. gains of 3.5%.
• Between the third quarter of 2001 and the second quarter of 2002, residential investment in Canada increased 13%, considerably higher than the 3% gain south of the border. This had a more positive effect on construction, retail and wholesale trade, and finance and real estate employment.

The authors are with the Labour Statistics Division. Geoff Bowlby can be reached at (613) 951-3325 or perspectives@statcan.gc.ca; Jeannine Usalcas at (613) 951-4720 or perspectives@statcan.gc.ca.