A string of positive economic news, with a caveat

Ukrainian Credit Union Limited.

After a string of rather bleak economic news and predictions for Canada, which have found their way to our recent postings, the start of 2017 has brought more positive reports. First off, Canadian GDP grew 3.5% in the third quarter of 2016, after the 1.3% decrease in the second quarter. Canada’s merchandise trade balance with the world posted its first trade surplus since September 2014, moving from a $1.0 billion deficit in October to a $526 million surplus in November (likely, a declining CAD had contributed to that growth). Exports were up 4.3% in November. And Canada’s main commodity, oil, has gained almost 20% in price since mid-November.

On top of all this, Canada’s employment rose by 108,000 in the fourth quarter which turned out to be the largest quarterly increase since the second quarter of 2010. December was a particularly good month for employment – it saw 54,000 jobs created, a quarter of all jobs created in 2016 (because of seasonality – Christmas hiring by retailers, which are part-time seasonal positions).

But there is a caveat in the employment statistics, which, probably, also reflects the nature of the current economic recovery. The gains in the number of jobs last year were mainly due to the growth in part-time employment, by 154,000, while full-time employment grew much less. This tendency is now called the Uber-ization of the Canadian economy which represents a shift away from full-time to part-time and contract jobs where people do not receive health care, employment insurance, pension and other social benefits. Scotiabank economist Derek Holt was quoted by the CBC philosophizing that this shift is due to the fact that “not everyone wants the alarm clock buzzing at 4:30 a.m. every day.” Really?