Canadian Labour Market Finally Showing Signs of Slowdown
Canadian Labour Market Finally Showing Signs of Slowdown 5,000 jobs lost in June Unemployment edges up to 6.2% from 6.1% last month.
After several months of above consensus growth, the labour market finally wavered in June and shed 5,000 jobs. The headline number hides a considerable loss of 39,000 full-time jobs, offset by a gain of 35,000 part-time. Full-time job losses have now occurred in three of the last four months. The move away from full-time work in favor of part-time is consistent with a slowing labour market and signals that more labour market weakness is likely still ahead of us. The softer job picture was enough to push the unemployment rate up 0.1 percentage points to 6.2%.
The regional picture tells a more troubling story. One of the mysteries of the Canadian job market to date has been the performance of Ontario, which despite struggling economic growth and considerable job losses in manufacturing has managed to continue to see overall job gains. This looks to have changed in June. Ontario shed 27,000 jobs, its largest monthly loss since April of 2003, pushing the unemployment rate in the province up 0.3% percentage points to 6.7%. And contrary to previous months, the goods producing sector was not responsible for the job losses. Gains in manufacturing employment more than offset losses in construction, keeping the goods sector an overall positive for employment growth. The services sector in Ontario on the other hand saw significant losses, shedding 31,800 jobs.
Outside of Ontario, job losses were also experienced in Newfoundland, Quebec and P.E.I. Western outperformance continued in the month with all provinces west of Ontario seeing gains (though outside of Alberta these were relatively muted). Alberta’s economy and labour market continues to operate on a different axis from the rest of the country. The addition of 10,000 more jobs in June brought the employment rate in Alberta to 72.2%, the highest on record and by-far the highest in the country.
Overall, June’s employment report shows a labour market that is moving closer in-line with the slowing economic growth picture. Job growth is a lagging indicator and the contraction experienced in the first quarter of this year is now showing up in the job numbers. Looking forward, we continue to expect the job market to underperform, particularly in Central Canada. Still, with the unemployment rate not far off its 30 year low, a slower pace of job growth will continue to be met by healthy (albeit slower) wage gains. For the Bank of Canada, this makes the decision to leave interest rates on hold a bit easier – an action that we continue to expect when the Bank meets early next week.
TD Bank Financial Group
The information contained in this report has been prepared for the information of our customers by TD Bank Financial Group. The information has been drawn from sources believed to be reliable, but the accuracy or completeness of the information is not guaranteed, nor in providing it does TD Bank Financial Group assume any responsibility or liability.
If you enjoyed this post, please consider to leave a comment or subscribe to the feed and get future articles delivered to your feed reader.
Comments
No comments yet.
Sorry, the comment form is closed at this time.