The headline numbers look good, but a leading economist sees warning signs drilling down into today’s jobs numbers from Statistics Canada.
On the job creation front, August surpassed economists’ expectations, as the Canadian economy added over 26,000 jobs. It was a much needed boost after a loss of over 31,000 positions in July. The increase in the number of jobs was due to a gain of over 52, 000 full time jobs , offset by a loss of 26, 000 part-time positions. Still, Statistics Canada says the national unemployment rate rose from 6.9 to 7.0 per cent, as more people entered the job market and began looking for work.
Conference Board of Canada chief economist Craig Alexander says that’s a positive sign. “People are more hopeful that jobs might be available. In and of themselves, the August numbers look favourable. The problem is when you stack them up against what happened in July, because in July 31,000 jobs were lost. So gaining 26,000 in August basically is only providing an offset.”
More worrying for Alexander is the sharp increase in Calgary’s unemployment rate. The Alberta jobless number decreased to 8.4% from July’s 8.6%. Our province still has the highest unemployment outside the Atlantic provinces. Calgary’s unemployment rate shot up to 9% from 8.6% in July. “The simple reality is it’s going to take a long time to adjust to the low commodity price world. And the adjustment is going to be very complex. There are workers who have lost their positions that are going to need to be reintegrated into the labour market and for some it’s not going to happen quickly.”
Another troubling statistic in today’s report was a drop in employment for a key demographic. “We had job creation for young people, aged 15 to 24. We also had job creation for workers 55 and older. But employment for what we call the core working age–ages 25 to 54–actually decreased by 25,000 in August. And in particular it was working age men that were having a lot of difficulty.” Alexander says that group includes those working in the resource and manufacturing sectors.
The Conference Board’s top number cruncher says the August numbers reflect some economic recovery after the slowdown that resulted from the Fort McMurray wildfires. Alexander expects the second half of the year to be much better than the first half, but I still think we have to recognize we’re going through a very long and protracted adjustment to the low commodity price world.”