Briefly: “Canadian unemployment rate falls” and more news

Canada’s economy continued to sputter in October, creating a tiny 3,000 new jobs – just enough to push the unemployment rate below eight per cent.

The jobless rate edged one-tenth of a point lower to 7.9 per cent, returning to the level it had reached in June.

But the improvement in the rate was more of a technicality than an indication of strong conditions, since there were fewer Canadians out looking for work during the month.

“Today’s soggy employment gain extends the broader theme of much more modest growth in Canada than seen in the opening months of the year,” said BMO economist Douglas Porter.

“There are no major implications from this mixed bag for monetary policy or the currency.”

The Canadian dollar moved a sliver above parity with its American counterpart in morning trading, up a little more than a quarter of a cent at 100.02 cents US.

The last time Canada saw robust employment was in June, when the economy added 93,000 workers. Since then, job gains have averaged 5,700 a month, about one-third what is required to keep up with population growth.

Economists did see a few bright spots in the lacklustre results, including that 47,000 full-time jobs were added, there were 38,000 private sector jobs, and self-employment declined.

The full-time gains were almost matched by a loss of 44,000 part-time workers.

“It was a case of in with the good jobs, out with the bad,” said CIBC’s Avery Shenfeld. “The country traded full-time jobs for fewer part-time positions, paid employment for typically lower-paid self employment and private sector hiring for a smaller public sector.”

The agency noted that employment has returned to pre-recession levels, although the jobless rate remains almost two points higher due to new entrants and growth in Canada’s population.

That’s one way of looking at it. Shenfeld notes that once population growth is factored into the calculation, the unemployment rate is nearly three per cent higher than before the crisis and hours worked are still nearly one per cent below.

The biggest gains in October came in the goods-producing sector, led by a 21,000 increase in construction, and 10,000 in manufacturing.

The number of people working in the service sector declined by 33,000, with losses concentrated in retail and wholesale trade.

The agency said job gains were strongest in Alberta, with 17,000 additional workers, while Nova Scotia fared the worst in the regional break-down, dropping 8,600 jobs.

Hourly wages increased by 2.1 per cent in October over last year.

While employment gains appears to have stalled of late, Canada has seen a marked bounce-back from the recession, although most of that came in the first half of 2010.

In the two years since employment peaked in October 2008, the country lost 417,000 jobs during the slump and recouped 423,000.

Not all sectors have recovered, however. The agency noted that manufacturing remains 10.8 per cent below pre-crisis levels, with significant losses in Ontario and Alberta. As well, transportation and warehousing jobs are down 5.4 per cent, and employment in natural resources remains 2.6 per cent lower.

Youth have been the most affected, with employment still down 7.8 per cent from the pre-recession level.

Compared to two years ago, employment has increased in health care and social assistance, as well as in professional, scientific and technical services.

-Canadian Press

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DundeeWealth’s profit soars

DundeeWealth Inc. stock was at its highest level in more than a year Friday after the company announced it will hike the dividends it pays annually by 114 per cent following strong profit and revenue growth in the third quarter.

DundeeWealth shares rose at much as $1.17 or about seven per cent to a morning high of $18.49, a new 52-week high for the stock.

The company’s third-quarter net income also more than doubled to $26.4 million or 18 cents per share, up from $12.9 million or nine cents per share in the comparable period of 2009.

Revenue at the mutual fund and wealth management company rose by 17 per cent to $223 million during the quarter, compared with $191 million a year earlier.

Revenue from management fees accounted for $140 million of the total, up from $109.5 million in the third quarter of 2009 and up from $134.8 million in the second quarter of 2010, DundeeWealth said in Friday’s announcement.

Assets under management increased to $42.3 billion, from $33.6 million, while assets under administration rose less dramatically to $26.6 million from $24.9 million in the third quarter of 2009.

DundeeWealth said it will begin paying dividends on a monthly basis, rather than quarter, starting with five cents per common and special share beginning on Dec. 1.

“We have overcome unprecedented challenges over the last three years, while at the same time streamlining our business, adding efficiencies and strengthening our higher margin revenue generating activities,” said president and chief executive officer David Goodman.

“With a strong balance sheet and continuing confidence in the future earnings potential of our company, it is a pleasure to continue to reward shareholders in the form of a higher dividend rate.”

– Canadian Press

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National home sales expected to slide

The Canadian Real Estate Association has lowered its home sales forecast for remainder of this year and into 2011.

CREA says national sales are projected to slide 4.9 per cent in 2010, and nine per cent next year.

The drop is tied to lacklustre economic and job growth, weak consumer confidence and interest rate hikes that are expected to resume next year.

Average home prices are expected to rise by 3.1 per cent across the country this year, reaching $330,200.

CREA says the uptick is expected to be felt in all of the provinces.

Next year, prices are projected to fall by 1.3 per cent to a national average of $326,000, tied to weakness in British Columbia and Ontario.

-Canadian Press

(11/05/10)