Workplace Issues
May unemployment rate unchanged as job creation stallsPart-timers keep jobless rate at 6.1%The Canadian economy's job-creation machine stalled in May, keeping the unemployment rate at 6.1% and narrowly averting an outright loss of jobs through a massive increase in part-time work. JULIAN BELTRAME - THE CANADIAN PRESS |
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Still, the fact there was no overall loss in jobs -- with a modest net 8,400 created in May -- showed the economy may be slowing but is not in recession, said Bank of Montreal economist Douglas Porter.
"If we were in a recession we'd be seeing monthly losses of 30,000, 40,000 and 50,000 jobs, three or four or five months in a row," he said.
"Even if the gains in the last five months have been somewhat suspect, the fact is we've had five months of job gains and we've had five months of job losses in the U.S."
In a separate report, the U.S. Labor Department said the country had lost another 49,000 net jobs in May.
The suspect nature of the Canadian employment report is that despite the modest advance, there were 32,200 fewer Canadians who held full-time jobs in May than the previous month, the biggest drop in that category since June 2006. 40,600 part-time jobs
What saved the economy from the first retreat in many months was that 40,600 part-time jobs were added, mostly in additional employment for adult women and students.
Another anomaly, given the dour news coming out of Ontario's auto sector, was that manufacturers added 34,200 jobs in May, with
Quebec plants gaining 13,700 jobs and Ontario's 15,300.
Last week, General Motors Corp. announced it was closing its truck plant in Oshawa, Ont., throwing 2,600 employees out of work by the end of next year.
"Given recent layoff announcements, it's hard to see the manufacturing sector as anything but a sustained source of job losses until the U.S. economy is back on its feet," said CIBC senior economist Avery Shenfeld.
He pointed out that despite May's reversal, factory employment is down 66,000 over the past year. Moreover, the sector has shed 344,000 jobs since the downturn began in 2002.
And as a key indicator of where Canada's employment picture is headed, total hours worked during the month fell 0.6%.
"We've still had a lot of job growth for an economy with nearly stagnant real output in the past two quarters (so) look for a few further months of soft or even slightly
declining employment," predicted Shenfeld.
Finance Minister Jim Flaherty said the monthly drop in full-time positions wasn't how he focuses on the numbers.
"We can easily see fluctuations from month to month, but I don't speculate. What I do is I look at the track record over the course of the time since we came into government," he said.
Canada's job market remains tight enough to keep pushing hourly wages up, an increase of 4.8% in May from a year earlier, almost three times the official 1.7% inflation rate.
While the jobs run may be over for now, Statistics Canada did note it has been quite a gallop. The agency said there were 339,000 more Canadians working in May than was the case a year ago, a 2% increase.
Meanwhile, the country's participation rate remained at its record high of 68% in May, and women kept entering the workforce in record numbers, with 35,000 more employed than last month.
"Women aged 25 and over entered the labour market in large numbers in May," the agency said. "The
participation rate for adult women reached an all-time high of 62.4%."
Also on the positive side of the ledger, health care, social assistance and other services added employment in May. But agriculture
and professional, scientific and technical services recorded losses.
May was also a good month for students, with older students aged 20 to 24 getting the summer jobs market off to a fast start as employment in the category grew by 29,000 compared to a year earlier. Most of that was part-time, however.
Regionally, Quebec was the only province with a significant employment increase, gaining 17,900 jobs in May.
DECLINE IN HOURS
"On balance, growth of employment is moderating and total hours worked are declining in response to the stall of real GDP growth," commented JP Morgan Canada economist Ted Carmichael.
"Employers are responding to the slowdown in growth as would be expected after a lengthy period in which the labour market has been tight: they are cutting back on hours worked rather than laying off workers who were hard to find over the past two years."
However, the jobless rate is edging higher as employment growth falls behind growth in the number of people entering the workforce.
"The result is that thelabour market is moving from an excess-demand situation into better balance, suggesting current wage pressures will ebb over the coming year," Carmichael said.
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