May 22, 2015
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According to Statistics Canada, the number of people receiving employment insurance (EI) benefits rose to 517,900 in March 2015 compared with 515,300 in March 2014. This is the first year-over-year increase since 2010. In March EI benefits rose by 8.9 percent to 38,800 while in February, the second straight month of more than 20 percent increase and the biggest rise since recession, surging to 29.4 percent. This was the fifth consecutive monthly increase for Alberta. Saskatchewan, Nova Scotia, Newfoundland and Labrador, which benefitted from the surge in crude oil prices, also saw larger increases in EI beneficiaries while British Columbia, Ontario and Prince Edward Island had smaller increases and benefits declined in Quebec by 1.5 percent from February. Alberta and Saskatchewan were major job creators during the last few years primarily because of the surge in crude oil prices however during the last year the crude prices have fallen by about 40% from their peak in June 2014 and therefore the rising fortunes of Alberta and Saskatchewan were expected to have a correction. The newly elected NDP government has promised to work with employers in the province but economists and financial commentators are still not confident of the government and are forecasting more troubles for the province in the near future.
Across the border, in the US, the number of EI beneficiaries fell in March and is pointing towards a strengthening labor market. While the US labor market is strengthening, Canadians are still feeling the pain because of last year’s collapse in oil prices. Last year’s drop in the loonie should have strengthened manufacturing in Ontario and Quebec but no substantial gains in labor market have been recorded yet. Yesterday S&P 500 closed at a record high of 2,130.82 beating its previous high of 2,129.2 from Monday. This shows the increased confidence and optimism of investors but the low volumes in US indices paint a different picture. The low volumes could mean that people are being cautious and skeptical of further growth in equity markets. It could also mean that investors are waiting for the quarterly earnings season to see if the companies are really growing or it was the growth fueled by the availability of cheap money.
Source- Bloomberg, Globe Investor Gold, Financial Post, Market Watch, Trading Economics