The employment news south of the border has to be one of the biggest stories of the day. Will Canada benefit?
Thursday that U.S. employers cut the fewest number of jobs in 17 years last year according to a report
by global outplacement firm Challenger, Gray & Christmas.
Anyone with a loved one working south of the border can rest easy because their job security has never been better.
According to the report U.S. employers announced 483,171 job cuts in 2014, 5% lower than 2013 and the lowest rate since 1997. Challenger, Gray & Christmas CEO John Challenger said about the numbers: “Layoffs aren’t simply at pre-recession levels; they are at pre-2001-recession levels.”
Challenger pointed out in its press release that the energy industry will experience increased job cuts in 2015 due to falling oil prices. However, those reductions will likely be offset by job creation in industries benefiting from higher consumer discretionary spending.
The most interesting tidbit: As many as 100,000 jobs could be created over the next decade manufacturing unmanned aircraft (e.g. Amazon home delivery of books, etc.) for non-military purposes.
Economics 101 says that when the U.S. gets a cold so too does Canada. The same can be said in the opposite direction. While Canada’s oil patch will suffer the same fate as those south of the border, Ontario’s job market will improve thanks to a lower dollar, lower input costs and strengthening U.S. economy creating additional export opportunities to the U.S.
On balance, however, Canada’s GDP should remain steady in 2015. At least that’s the view of Paul Ferley, assistant chief economist for RBC Economics Research who stated
in the Financial Post Monday that RBC is “not expecting a big hit to GDP, so on net, nationally, we’re not expecting a big hit on the overall [employment] numbers.”
The news in the U.S. is good. Unfortunately, our reliance on oil-related industries will provide a muted benefit to the Canadian economy and job market.