Canada job market set for slow growth as unemployment rate falls to 6.8%

Financialpost.com
July 8, 2016
By Gordon Isfeld

Canada could be in for a long stretch of slow or even no-growth employment.

That pattern already appears to be solidifying in economically critical provinces like Ontario and Alberta.

For now, and likely for many months to come, British Columbia stands alone as the country’s consistent source of job creation.

So, it’s not surprising to see last month’s data showing a flat labour picture overall, one with few employment opportunities and fewer people even bothering to look for work.

June’s jobs report showed little movement: a net loss of 700 positions, accompanied by a slight decline - 6.8 per cent from 6.9 per cent - in the unemployment rate, Statistics Canada reported Friday.

In May, about 14,000 jobs were added to the economy - a bigger number but not a statistically significant move.

“It is typically considered a good thing when a country’s unemployment rate falls, but that is not the case for Canada in June,” Brian DePratto, at TD Economics, said in a research note.

“Beneath the effectively zero change in hiring lies weaker details.”

There was a decline of 40,100 full-time positions in June, Statistics Canada said, but that was offset slightly by a gain of 39,400 part-time workers.

At the same time, the public sector shed 27,000 jobs in June and private positions fell by 10,500. As well, 37,700 more people said they were now self-employed, compared to the previous month.

Economists had forecast a gain in overall employment of at least 5,000 last month, but with the jobless rate rising to seven per cent.

“In terms of growth, I think it’s all about B.C. at this point. And, of course, that’s really been arguably the main regional story over the last year,” said Douglas Porter, chief economist at BMO Capital Markets.

“There’s been a lot of focus on the weakness in Alberta. But I think an equally and offsetting story has been the phenomenal strength in the B.C. labour market,” he said.

“Looking ahead to the second half of the year, it’s pretty tough to see the job market making much significant headway - given the clouds that are surrounding the global outlook, whether it’s Brexit, or Italian banks or the upcoming U.S. federal election.”

Employment in Alberta, already hurting from the prolonged weakness of oil prices, was down 1,900 in June.

But muddying the jobs data was the fact that for the second month in a row, Statistics Canada was unable to collect employment data in the Fort McMurray area of Alberta, where the May wildfires forced the evacuation of residents and shut down oil production facilities in the northern region of the province.

Instead, the federal agency used data collected from “similar respondents from surrounding areas” to estimate of residents’ responses to the labour survey.

Also continuing to suffer from weak employment was Ontario, which shed 4,200 positions. Meanwhile, British Columbia’s labour market continued to thrive in June, adding 16,000 jobs.

By industry, construction lost 29,000 positions and manufacturing fell by 13,000, while accommodation and food services added 20,000 workers.