In Bill Morneau’s fight to keep his job, a falling unemployment rate helps – Politics

For a finance minister in desperate need of good news, word that Canada’s unemployment rate has hit its lowest point in almost a decade — and one of its lowest levels since the 1970s — could not have come at a better time.

If the opposition parties have their way, embattled Finance Minister Bill Morneau may yet sink the Liberals’ chances of re-election in 2019. But governments that keep the unemployment rate dropping during their mandate are more often than not given another term in office.

The latest numbers from Statistics Canada’s Labour Force Survey put the unemployment rate at 5.9 per cent in November. The last time it was that low was between August 2007 and February 2008, when the unemployment rate was hovering between 5.8 and 6 per cent. Prior to that, the last time the annual rate dipped below 6 per cent was in 1974.

Not surprisingly, a lower jobless rate bodes well for a government’s re-election prospects.

Since 1949, the annual unemployment rate averaged 5.9 per cent in election years in which federal governments were re-elected. It has averaged 7.6 per cent in election years coinciding with a government’s defeat.

Follow the trends

The trend line is also significant.

Though Brian Mulroney’s Progressive Conservatives were re-elected in 1988 when the unemployment rate was 7.8 per cent and Jean Chrétien’s Liberals were victorious in 1997 when the rate was 9.1 per cent, these governments had seen the unemployment rate reduced by 3.5 and 2.3 points, respectively, since the previous election.

On average, the unemployment rate has dropped by 0.4 points between elections that returned a government to office, while it has increased by 1.2 points between elections resulting in defeat.

Since 1949, six of the seven governments presiding over the biggest decreases in the jobless rate were re-elected — while five of the six governments that saw the biggest increases were defeated or reduced from a majority to a minority government.

But the Trudeau government is the fourth consecutive one to see the unemployment rate drop during its entire tenure.

Between 1980 and 1984, when Pierre Trudeau and John Turner were in the prime minister’s office, the annual unemployment rate averaged 9.9 per cent.

That dropped to 9.5 per cent during the Mulroney-Campbell years, to 8.2 per cent during the Chrétien-Martin era and to 7.1 per cent under Stephen Harper.

So far, Justin Trudeau’s government has averaged a monthly…

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