Canada’s unemployment down but more part-time workers

OTTAWA: The unemployment rate in Canada has slid to the lowest level since January 2009, but most of the job gains have been in part-time positions and the public sector, according to Statistics Canada.

Canada’s unemployment rate for November fell to 7.6 per cent, an three-tenths drop in unemployment.

StatsCan said the lower unemployment rate was mostly due to 43,600 Canadians —almost all workers under 25— leaving the labour market, maybe because they’ve become discouraged.

The agency noted that in the past year about 40 per cent of the 318,000 new jobs created by the economy have been part-time positions.

Nationally, full-time employment and the private sector dropped 11,500 workers.

Region by region

The only exception was in Ontario, where 31,200 jobs were created, mostly full-time ones and all in the services sector.

That helped push the province’s jobless rate down four-tenths of a point to 8.2 per cent, also the lowest since January 2009.

Quebec experienced the biggest drop in employment, 14,100, followed by Manitoba, 3,000. Other provinces saw little change.

Canada as a whole did see job gains in the services sector, wholesale and retail trade, and accommodation and food services.

Employment also rose in finance, insurance, real estate and leasing. Construction was flat, but that sector has had a remarkable turnaround in the past year, gaining 89,000 jobs.

Manufacturing cuts

But goods producing industries shed 29,000 jobs. The factory sector is now down to 1.7 million workers, about 47,000 less than a year ago.

“With this decline, manufacturing’s share of total employment continued its long-term downward trend, reaching 10 per cent in November, the lowest since comparable data became available in 1976. This was down from 15 per cent in the early 2000s and 19 per cent in 1976,” the agency said.

Scotiabank economist Derek Holt called the results “mildly disappointing,’” adding the unemployment rate will likely rise in coming months.

“The dramatic slowdown in economic growth is preventing any real improvement in labour market conditions,” added David Madani of Capital Economics.

“Not only is the economy struggling to generate enough jobs to have a meaningful impact on reducing the unemployment rate, it is also struggling to produce high-paying, full-time private sector employment, which must be a tad disconcerting for the Bank of Canada.”

Most economists expect the central bank to keep the policy rate at one per cent next week, fearing any further increase in interest rates will strengthen the dollar and weaken the recovery.

South of the border

The news wasn’t much better in the US, where the jobless rate rose from from 9.6 per cent to 9.8 per cent, as the economy spit out only 39,000 new jobs, compared to October’s 172,000.

Retailers slashed 28,100 jobs. Factories sliced 13,000. Financial firms cut 9,000 and construction companies trimmed 5,000. The US unemployment rate has now topped nine per cent for 19 straight months, the longest stretch on record.

Analysts see the US employment situation as a key marker for the Canadian economy, since the slowdown in growth has largely come in the export sector, particularly goods headed south of the border.

Economists say it could take until near the end of this decade to drop the unemployment rate to a more normal 6 per cent.

Paul Dales, U.S. economist for Capital Economics called the numbers “a painful reality check.”

“The truth is that the economy is going nowhere at a time when companies are not willing to boost hiring,” he added.

Joel Naroff, president of Naroff Economic Advisors, insisted the recovery is not faltering and believed December’s employment figures would probably show a rebound.

“We shouldn’t panic. In any recovery, it is not smooth sailing,’” he said.

© The Canadian Press