FINANCIAL ICEBERG

Always consider hidden risks

​

CHARTS

Canada s Weakening Labor Market

( From Statistic Canada, Globe and Mail, CBC, The Record, Financial Post )

If you would like to receive our free daily markets updates, please Sign-up

The Situation

​



​​

Canada’s job performance last month was the worst since the global recession as 54,500 workers joined the ranks of the unemployed, all full-time and all in the important private sector, bleak new data from Statistics Canada showed last week.

​

That more than reversed the 50,700-job gain in February, while economists had forecast an increase in jobs of up to 6,500 during the month.

​

That's the worst month for Canadian employment since before the last recession, in February 2009 when 69,300 people found themselves out of work. . When added to the numbers for January and February, they show that Canada's economy has lost 26,000 jobs so far in 2013 as a whole.

​

​ The 54,500 overall jobs retreat included a 38,700 pick-up in self-employment, considered a low-paying segment of the labour market. Among employer-paid workers, the loss was actually 93,100, with 85,400 of those coming in the private sector.



As well, hours worked fell 0.4 per cent and wages were only 2.1 per cent higher than they were at this time last year. And for the manufacturing sector, hours worked fell 1.4 per cent on a monthly basis and down 0.8% than they were at this time last year.

​

“The underlying numbers are ugly but the employment decline would have been even worse but for a large jump in self-reported self-employment,” noted labour economist Erin Weir of the United Steelworkers.



The total of employment in march was 17,641 thousands, still 1.2% above the year-over-year level as shown by the graph below.

​







​

Canadian Employment

Despite the decline in March, employment was 1.2% or 203,000 above the level of 12 months earlier, with the increase mainly in full-time work. Over the same period, the total number of hours worked also rose by 1.2%.



Provincially, employment declined in Quebec, British Columbia and Alberta, and edged down in Ontario. The only province with an increase was Nova Scotia.



In March, there were fewer people employed in three industries: accommodation and food services, public administration and manufacturing. At the same time, there was little change in the other industries.



There were 85,000 fewer private-sector employees in March, while the number of self-employed rose by 39,000 and the number of public-sector employees was little changed. Compared with 12 months earlier, the number of private-sector employees increased by 1.0% or 111,000, while the number of self-employed was up 2.1% or 55,000 as a result of the gains in March. Public-sector employment was little changed over the 12-month period.







Canadian Unemployment rate

Industry employment



​By industry, the biggest losers in March were manufacturing, which shed 24,200 workers ( employment growth in the spring of 2012 was followed by losses since the summer, leaving employment in this industry down 2.8% from 12 months earlier ) ; accommodation and food services, which declined by 24,900 ( this left employment in the industry similar to the level of 12 months earlier ).; and public administration, down 24,300 ( leaving employment in this industry down slightly from 12 months earlier ) . Construction was also down by almost 10,000.



The gainers were few and far between. The most notable was a 12,100 increase in finance, insurance and real estate, and a 10,300 gain in the professional, scientific and technical services category.

​

There was an increase of 39,000 among self-employed people that counteracted the decline. “In each of the first three months of the year, we’ve seen manufacturing employment drop by more than 20,000. This to me is arguably the most disturbing aspect of this report.”

​



Employment declines among people 25 to 54



Among people aged 25 to 54, employment declined by 47,000, equally divided between men and women. Compared with 12 months earlier, employment for this age group was up 0.6% or 68,000.



Employment among those aged 55 and over was little changed in March. On a year-over-year basis, employment among people in this age group rose by 4.2% or 135,000, partly a result of population ageing.



Among youths aged 15 to 24, employment was also little changed in March, while their unemployment rate increased 0.6 percentage points to 14.2%, as more youths searched for work. Employment among youths has been on a slight upward trend since August 2012.

​

Much of the losses came among those in the core working-age group of those between 25 and 54. Among those younger than 25 and older than 54, the job numbers were pretty steady.

​









​​

Unemployment Rate



​​The job losses pushed Canada's jobless rate higher to 7.2 per cent. As a result, the unemployment rate rose 0.2 percentage points to 7.2% in March. Forecasters had expected the rate to remain at 7%. “If you look at job creation since the depth of the global recession July 2009 employment in Canada has increased by nearly 900,000 and is now more than 465,000 above its pre-recession peak,” he said, adding that the economy as a whole is also above pre-recession levels.



March’s jobs loss was the biggest one-month decline since February 2009 and, with a small retreat in the number of people looking for work, helped lift Canada’s unemployment rate 0.2 to 7.2 per cent.







​​



Market Impact



​​The Canadian dollar lost half a cent to trade below 98 cents US in reaction to the news.



"The loonie did take a big step back in the wake of the dismal data, but remains curiously close to parity given the onslaught of disappointing news for Canadian growth in recent months," Bank of Montreal economist Doug Porter noted

​