OTTAWA — There is mounting evidence that Canada’s economy is springing back to life, bringing with it the spirits of ordinary Canadians — except, it seems, when it comes to the question of whether or not they’ll have a job to go to next month.
As the recession relaxes its steely grip on the country, employment remains among the last of the country’s economic wounds to heal, usually because leery firms are biding their time lest the signs of improvement prove a false harbinger of better times ahead.
That’s why the consensus is predicting Statistics Canada, which releases its latest employment figures Friday, will reveal the country dropped another 36,000 jobs in May, and that jobs will keep disappearing for most of the year and possibly well into 2010.
The expected losses would completely wipe out April’s surprising 36,000 pick-up, which many economists believe overly flattered Canada’s ugly labour market.
“I don’t believe the StatsCan report for April reflected material improvement for job markets,” said Derek Holt, vice president of economics with Scotia Capital. “I think it was just a big head-fake on people declaring themselves self-employed for involuntary reasons.”
After five months of vanishing jobs, April’s data shocked most observers — until it became clear the gains were based entirely on 37,000 new jobs in the self-employment category.
In a recession, that is most likely an indication that the newly jobless were trying to create their own work because regular work couldn’t be found, they say.
Not that there aren’t signs of life — the so-called “green shoots” cited by economists as they scour for hope amid the blackened economic landscape — appearing in increasing regularity in Canada, as well as in the U.S., Europe and Asia.
Wednesday’s correction notwithstanding, North American markets are up close to 40 per cent since the lows of early March. Oil prices have also been moving upwards on the expectation of building demand in China.
In the U.S., the epicentre of the financial and economic disaster — housing — is showing signs of having hit bottom and beginning a slow climb back. U.S. pending home sales jumped 6.7 per cent in April, the third consecutive month of growth.
As well, Wednesday brought two mildly encouraging signals in the non-manufacturing and in an employment leading indicator, which showed job losses would likely come in at 500,000 in May. That’s bad, but better than the 600,000 and 700,000 levels of the past few months.
In Canada, housing got off to a quick spring start in the Greater Toronto Area with home sales rising by two per cent last month, the first annual increase in more than a year.
Canadians have started to notice the brightening sky.
Consumer confidence hit a 15-month high last month, according to a Harris-Decima poll that found only 29 per cent of Canadians surveyed expecting economic times to worsen in the next year, compared to a pessimistic 59-per-cent reading in February.
There’s even a sense they’re willing to cut Jim Flaherty some slack: A Canadian Press-Harris Decima poll released Wednesday suggests only 28 per cent of respondents think the finance minister should resign for overshooting his deficit projection by $16 billion.
Even among Liberal supporters, 54 per cent said they didn’t think he should lose his position for allowing the budget deficit to balloon to more than $50 billion — not the $34 billion predicted in the budget four months ago.
A survey by the Canadian Federation of Independent Businesses also found indications of improving sentiments, although the business confidence reading remains below historic levels.