Briefly:

Canada’s unemployment rate fell but there isn’t much to write home about if you don’t live in Ontario.

The surprise plunge in the unemployment rate from 7.9% to 7.6% is due to a mass exodus out of the labor force. While a drop in unemployment rates should signal good tidings for the future, this particular plunge was reflected in a drop in the participation rate from 67.2% to 66.9%. The sudden change in the active workforce points toward a drop in job quality.

The 15.2K net jobs created in November were certainly insufficient to keep up with the natural growth in the labor force, which stands around 23K/month. As a result, 11.5K of Canadians waved goodbye to full time employment, and moved on to mere part-time employment. The brutal truth is that had the participation rate remained unchanged, the unemployment rate would have actually leaked higher, hitting 8%.

The give up in full time employment proves extrtemely particularly unsatisfactory and as for jobs mix, there have been significant losses in manufacturing at -29K, and in financial services at -23K. The 26K jobs created in trade, and the 17K jobs generated in the accommodation and food services category do not make up for these failing numbers.

In the big picture, the job market in Canada in the second half of the year bears little resemblance to that of the first, which offered a robust burst of jobs growth with better than 300K jobs created. With one month left to go, job growth in the second half of the year is running at less than 40K jobs.

Where last month’s report disappointed in terms of the number of actual jobs created, it more than made up for it in terms qualitative factors with lower paying jobs traded in for the so called “good” jobs and part time employment traded in for full time work. In November we have very much the opposite taking place.

Ontario saw 31,200 jobs created, many of them good full-time jobs, the underlying story is one of overall weakness in Canada’s labour force.

Nationally all of the job gains, meagre as they were, came in part-time positions and in the public sector. Meanwhile, 11,500 workers dropped from full-time positions and the private sector.

In the underlying numbers, Ontario was the only true bright spot. But economists noted that the province was also the hardest hit during the recession, and is one of the few regions in Canada that still has not recovered all the jobs lost during the downturn.

Statistics Canada said the decline in the unemployment rate was mostly due to 43,600 Canadians – almost all young workers in the 15- to 25-year-old category – leaving the labour market, perhaps because they have become discouraged.

The bottom line is that the Canadian workforce must be patient and look toward the future with higher hopes. The Canadian economy by and large appears to be settling into a slow growth mode that will be characterized by incremental change as we head into 2011 and 2012 rather than robust economic recovery. This is a common factor across most forecasts for Canada.

U.S. jobless rate rises

The U.S. unemployment rate climbed to 9.8 per cent in November, a seven-month high, as hiring slowed.

Employers added only 39,000 jobs last month, a sharp decline from the 172,000 created in October, the Labour Department reported Friday. The weakness was widespread. Retailers, factories, construction companies, financial firms and the government all cut jobs last month.

Many economists were predicting the addition of 150,000 jobs. The economy has recently flashed signs of gaining momentum with busier factories, rising auto sales and a good start to the holiday shopping season. But that didn’t translate into mass hiring in November.

The report was a reminder that the economic recovery is proceeding more slowly and fitfully than many economists had expected. It is likely to push lawmakers to pass an extension of long-term unemployment benefits, which expired this week.

Stock futures fell as the disappointing job figures began to cool this week’s rally on Wall Street.

Private companies – the backbone of the economy – created only 50,000 jobs. That was down significantly from the 160,000 private-sector jobs created in October and was the smallest gain since January.

With hiring so weak, the unemployment rate rose from 9.6 per cent to 9.8 per cent. The jobless rate has now topped nine per cent for 19 straight months, the longest stretch on record.

All told there were 15.1 million people unemployed in November.

– Associated Press

Flaherty: Balance budget schedule not set in stone

Finance Minister Jim Flaherty says the federal government’s five-year plan to balance the budget is not set in stone – and could be either pushed back or accelerated.

The Conservative government has projected balanced books by 2015. But as Flaherty kicks off his pre-budget consultations, he says one of the key questions he will be asking is whether the current plan is realistic.

“Should we balance the budget sooner than the present plan, which is 2015-16?” he said. “Should the timeline be delayed until later on?”

He was in Montreal on Friday as part of a series of meetings to gather input for the next federal budget.

They come as new jobless figures on both sides of the border suggest the global economic recovery remains weak.

Statistics Canada announced that Canada’s jobless rate fell to 7.6 per cent last month, but that the new jobs added to the economy were all part-time.

In the U.S., unemployment has increased to 9.8 per cent.

Flaherty said that given the continued uncertainty, any change to government’s deficit-reduction plan must be weighed against the modest economic growth Canada has achieved in recent quarters.

He was asked at a news conference about the possibility of delaying a balanced budget, but chose to focus his answer instead on the possibility of speeding up the timeline.

“We’re open to that and we’re listening,” he said. “To do that would require some measures and some increasing restraint on spending, so we have to look at that carefully.”

– Canadian Press

Pro-Financial launches new fund

Pro-Financial Asset’s has announced its latest product: the “Pro FTSE NA Dividend Index fund”.

The fund will track an index, custom designed and developed by FTSE Group, which applies a screening methodology to focus the index on securities with the highest forecasted dividend yields. Based on the FTSE Custom North American Dividend Index, the new fund is designed to provide monthly income to investors through a portfolio of North American dividend paying securities.

Highlights of the fund include a 5% targeted annual yield at launch, monthly distributions, a total of 70% Canadian dividend securities and 30% US dividend securities at rebalance, as well as Currency hedge of US exposure in order to minimize currency risk, and systematic annual rebalancing.

“We have enjoyed great success in our partnership with FTSE Group, and we are very proud to launch a new fund based on a custom built index,” said Pro founder and CEO Stuart McKinnon.

The composition of the fund will include 35 constituents of the FTSE RAFI Canada Index and 15 constituents of the FTSE RAFI US 1000 index, with each security equally weighted on the annual rebalance date. A monthly distribution will be paid as dividend income and return of capital.

Distributions will commence on January 31, 2011.