January 11, 2004
Canadian economy strong and growing.
While the US economy continues to melt down (the rising stock markets notwithstanding), the
Globe and Mail reports that the Canadian economy had a great year in 2003, and continues to grow. Stock markets are up, the loonie (the Canadian dollar is up), employment is growing. Growth, in fact,
far exceeded even the most optimistic forecasts. Fifty times more jobs were created in Canada during December than in the US.
The Canadian economy finished 2003 on a strong note, generating new jobs at more than twice the expected pace in December, Statistics Canada said Friday.
The report — described by analysts as unambiguously strong — was also seen as giving the Bank of Canada licence to take a more moderate approach to interest rates when it makes its next decision on whether to cut borrowing costs later this month.
December's employment gains also triggered another run up in the Canadian dollar, bringing it within striking distance of the 79-cent (U.S.) mark.
The loonie closed at 78.67 cents, up 0.58 of a cent from Thursday.
In the final month of the year, the Canadian job market — which had stalled for much of the early part of 2003 — added a surprising 53,100 jobs. That marked the fourth consecutive month of employment growth in this country and far exceeded even the most optimistic forecasts.
What's particularly relevant to Americans about this is that Canada is dealing with so many of the same problems that afflict the US, (rising Euro, Chinese trade, mad cow disease, etc.), and is tied in many ways to many troubled US corporations. Yet despite all of this it manages to grow. Which would suggest that the problems in the US are of its own making, not some imagined problems in the global economy.
It's not all good news. Manufacturing jobs declined, but were more than made up by gains in health care, social services, finance, insurance, and, especially, the booming real estate industry. On the other hand, over 40,000 of the new jobs created in December were full-time permanent ones, whereas it would appear that the measly 1,000 jobs in the US were most likely temporary seasonal ones.
The continually rising loonie leads me to suggest/predict that the Canadian dollar may well achieve parity with the US dollar by the end of 2004. Which would be absolutely amazing. It's very likely though that the Canadian bankers may take measures, raising interest rates, to slow this down, although I don't think even that will make much difference at this point.
