Where
are the jobs? Canada. Why?
Karen
Jobs:
Canada thrives, U.S. falters
By
TERRY WEBER, 
Globe and Mail Update
Friday, January 10 – Online Edition, Posted at 11:28
AM EST
The
Canadian economy again ran circles around its U.S. counterpart in December,
pumping out twice as many jobs as expected while employment south of the
border remained on life support.
As with almost every month last year, the December numbers painted a
picture two economies undergoing dramatically different recoveries.
Figures
released
Friday show a whopping 58,000 jobs were created in Canada in December,
continuing this country's employment winning streak and exceeding economists'
expected gain twofold. In 2002,
Canada enjoyed its highest annual employment growth rate in 15
years.
In
the United States — where the economy has yet to mount a convincing recovery —
job losses for the month totalled 101,000. Consensus forecasts had called for a
modest increase of about 20,000 jobs as economists held out hope of signs of a
firmer recovery. For the year, U.S. payroll employment
fell by 181,000 positions, following a loss of 1.4 million jobs in
2001.
http://www.globeandmail.com/servlet/ArticleNews/front/RTGAM/20030110/wjobs/Front/homeBN/breakingnews
Payrolls
Stage Unexpected Slide
Fri
January 10, 2003 12:05 PM ET
By
Caren Bohan
WASHINGTON
(Reuters)
- The U.S. economy suffered a surprise 101,000 jobs drop in December, the
government said on Friday in a report that underscored gloom among retailers
and other employers and raised the political stakes for President Bush as he
touts a $674 billion stimulus plan.
The
data stirred talk the Federal Reserve might not be through cutting interest
rates and sent bond prices soaring. Stocks held their ground as investors
brushed aside the grim jobs news and remained steadfast in their hopes
stronger economic growth would finally take hold in 2003. But the dollar
plummeted to a three-year low against the euro.
The
slide in payrolls outside the farm sector -- worsened by unexpectedly weak
hiring by retailers during the crucial holiday shopping season -- was the
biggest drop since February, when the economy shed 165,000 jobs. For 2002 as a
whole, the economy lost a net 181,000 jobs. Despite the steep drop in jobs and a
fall-off in worker hours in December, the unemployment rate stayed steady last
month at 6 percent, according to the Labor Department's monthly employment
report.
"My
guess is there will be more economists that will begin to forecast the Federal
Reserve will lower short-term interest rates to 1 percent from 1.25 percent,"
said Hugh Johnson, chief investment officer at First Albany Corp. in New York.
"I think it is too early to reach
that conclusion, but nevertheless you are going to hear that," he said.
The
White House said Bush was "very concerned" about the job losses and urged the
U.S. Congress to pass his sweeping plan that would eliminate taxes investors
pay on dividends and speed up income tax reductions. "The president views this morning's
data as another reason for Democrats and Republicans to work together to get
something done," said White House spokesman Ari Fleischer.
Fierce
Battle Over How To Fix Economy
But
the jobs figures are more likely to add to an already charged political debate
about how any plan to stimulate the economy should be structured. Democrats have denounced Bush's
proposal as a windfall for the rich that won't offer enough of an immediate
kick to economic growth and will swell the federal deficit.
"I
suspect the Democrats will argue that what the economy needs is major
short-term stimulus," said Joel Naroff, economist with Naroff Economic
Advisors in Holland, Pa. "The
Republicans will probably argue that tax rate cuts scheduled to occur over the
next couple of years should be pushed into this year. It's even possible we
wind up with both," he said.
December's
drop in payrolls was a much weaker performance than the 22,000 jobs gain
projected by U.S. economists in a Reuters survey. In a further sign of labor
market woes, the Labor Department revised its latest report to show an 88,000
drop in payrolls in November, sharper than the 40,000 decline it initially
reported.
Last
month's job losses were led by the retail sector. Department stores, toy
stores and other establishments curbed hiring amid disappointing sales during
the key holiday season, causing a seasonally adjusted 104,000 drop in retail
payrolls.
"It
wasn't a big retail season," said Tom Nardone, an official with the Labor
Department's Bureau of Labor Statistics. Nardone, who heads the division
of Labor Force Statistics, said there was a big drop within the retail sector
in hiring at restaurants and bars, a continuation of a downward trend. He also
said hiring in the miscellaneous retail category, which includes toy stores,
book stores and catalogs, was lower than the usual expectation for the holiday
season.
Using
the Labor Department seasonal adjustment procedures, the lack of hiring
translates into a drop in jobs. U.S. manufacturers also contributed to
the deterioration, with jobs in that sector falling 65,000. Gains in
government jobs and in some service-sector industries helped to offset those
declines. The average workweek
shrank to 34.1 hours in December from 34.2 hours in November. Average hourly
earnings rose 0.3 percent in December after a 0.2 percent rise in November.
Soggy
Growth
Throughout
the economy, this past week has seen a slew of job-cuts announcements, a sign
the pain is not over. Alcoa Inc.
AA.N
, the world's largest aluminum producer, plans to cut 8,000 jobs and AT&T
T.N
said it would cut 3,500 jobs. United Airlines, which is under bankruptcy
protection, said it will lay off 1,500 management and salaried workers. Retailer
J.C. Penney Co. Inc. JCP.N
and health insurer Cigna Corp.
CI.N
also announced jobs cuts.
"We
still have lingering high unemployment and we have weak payrolls, suggesting
the economy is very soft on the employment side," said Gary Thayer, chief
economist at A.G. Edwards and Sons Inc. in St. Louis. "It also suggests the economy could be
helped by the economic stimulus plans, either the Democrats' or the
Republicans'. Those are both well-timed right now," he added.
In
a sign of the growing concern among politicians about the struggling economy
and the lackluster job market, the U.S. Congress passed a measure extending
jobless benefits for nearly 800,000 laid-off workers whose payments were cut
off last month. It was the first action of the 108th Congress after it
convened this week. Bush signed the bill just hours after the House of
Representatives approved it
http://www.reuters.com/financeNewsArticle.jhtml?type=businessNews&storyID=2025185
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