Canada singing labour market blues

Canada singing labour market blues
The chase by Marty Cej:

The Canadian economy shed 2,800 jobs last month, countering expectations for a gain of 15,000 and bringing the number of jobs lost since the end of September to 37,000. Sure, the unemployment rate dropped to 7.4 percent from 7.6 percent, but that was due to 37,900 people deciding to give up on looking for a job. Forget about the unemployment rate in this report, Scotia Capital's economic team told clients this morning, the surprise decline "is a total head fake." The details of the job losses and meager gains were as lackluster as the headline with young workers -- aged 15 to 24 -- registering a tumble of 26,800 positions (15-year-olds? What? Who shut down all the mercury and asbestos mines?). The youth unemployment rate rose to 14.7 percent from 14.5 percent! With March break upon us and high school and university students sending out resumes and CVs,

I'd like to see us do more with the youth component of the report. BMO's Doug Porter concludes that while the overall report "isn't as ugly as the headline dip in employment, the main message is that the domestic economy is now clearly struggling to post meaningful growth." TD economist Diana Petramala is more pointed, arguing that the weakness in employment since mid-2011 reflects "a small crisis of confidence." Just about every category of the jobs report represents a fresh angle. And let's be sure to use the Bank of Canada's less pessimistic tone yesterday to frame our coverage today.

It was a different story in the U.S. where the economy added 227,000 jobs last month, topping the 210,000 average expectation and marking the strongest six months of jobs growth since 2006. I think I just heard several Republican-candidate penny-loafers kick over several wastepaper baskets. U.S. stock index futures are heading higher.

Among the risks facing the Canadian economy -- European debt crisis, sluggish U.S. growth, vegans -- the one that seems to be getting the most attention from the Bank of Canada and the Ministry of Finance is household debt and an overheated housing market. Even the CEOs of Canada's biggest banks agree that the housing market could stand to chill out just a wee bit.

But that isn't great for business so the banks decided to cut their mortgage rates this week in an attempt to juice a market that some say has already done enough steroid cycles. More needs to be done on the Canadian housing market, the Mortgage Wars (flash of lightning, brief crash of thunder) and the coming budget.

Speaking of the budget, Prime Minister Stephen Harper and Finance Minister Jim Flaherty are scheduled to make an announcement at Toronto's wee island airport, called Billy Bishop Toronto City Airport. They are expected to say something about the creation of a tunnel from the "mainland" to the island, a project that would cut the six-minute commute by ferry in half. Can you imagine? It'll be like Canada's own Channel Tunnel, or Chunnel, only we'll combine Toronto and Tunnel to create, ummmm, the Tunnel! Anyhow, Harper and Flaherty will likely take questions. We'll be there.

Financial markets have greeted the biggest sovereign debt restructuring in history with a resounding "meh." For consistency in our coverage of the details, I'll turn to the fixed income teams at Goldman Sachs and Investec Bank Plc in London, whose job it is to analyze the swap operations for clients and their own prop desks: Full tenders and consent to change terms were given for 85.8 percent of securities. Collective Action Clauses will be triggered bringing the total participation rate to 95.7 percent. We can note in conversation that 69 percent of foreign law bonds were tendered and the 95.7 percent total participation rate reflects the collective action clauses being invoked here as well.

What remains to be seen is whether all the cajoling, coercing and collective-actioning will result in billions of dollars of aid making its way to Athens. German Finance Minister Wolfgang Schauble said a few moments ago that hope is growing that euro-zone risk is under control but that European finance ministers will decide on the distribution of Greek aid next week. Presumably, Europe's finance ministers have better things to do today, this being Friday. Auf wiedersehen.
Every morning Managing Editor Marty Cej writes a "chase note" to B