By Todd Humber
For employers on both sides of the border in North America, it has been a very happy new year.
Canadians returned to work after the holidays greeted by headlines that the job numbers from December were much stronger than expected. Nearly 40,000 jobs were added in December, obliterating market estimates that expected a meager 5,000.
The unemployment rate slid to 7.1 per cent, the lowest level in four years.
The numbers are not only defying expectations, they are “defying gravity,” said Doug Porter, deputy chief economist at BMO Capital Markets.
Some economists point out the job numbers can’t continue growing at that rate, but we’ll take the good news where we can get it.
And it serves as yet another reminder for organizations, and HR professionals specifically, that there’s no time like the present to scrutinize recruitment and retention efforts to ensure you can find and keep top talent.
Interest rates rising in 2013?
If the economy continues at this pace, there could be an interest rate hike by the Bank of Canada later this year. The rate has been held at one per cent since September 2010.
The hike might not be welcome for homeowners with variable rate mortgages, but talk of an interest rate hike certainly means there are signs of life in the economy.
If that means rising stock markets, it could spell relief for pension plan sponsors and employees who have watched their defined contribution plans sink or barely tread water in recent years.
Positive fiscal cliff fallout
In the United States, it may have been unnerving to watch the circus surrounding the fiscal cliff in Washington. But when U.S. politicians finally hit the brakes, they made a significant training and development tax break permanent.
“The new plan makes permanent a tax exclusion for up to US$5,250 for employer-provided education assistance for college and graduate school education,” wrote Linda Stern in her Stern Advice column for Reuters.
The fiscal cliff bill also contains additional nuggets of good news for employees and employers:
•it extends, through 2013, the monthly exclusion from taxable income for employed-provided mass transit benefits (to US$240 from $125)
•it makes permanent a tax exemption for adoption expenses paid by an employer, up to US$10,000.
It also makes a US$10,000 tax credit for families that pay their own adoption expenses permanent, wrote Stern.
We’ve barely taken the wrapping off 2013. But so far it looks like our favourite new toy — let’s hope the shine doesn't come off it too quickly.
Todd Humber is the managing editor of Canadian HR Reporter, the national journal of human resource management. He can be reached at firstname.lastname@example.org.