January marks highest monthly employment decline on record
Today’s Statistics Canada release of January employment numbers reveals staggering job losses:
Employment fell by 129,000 in January (-0.8%), almost all in full time, pushing the unemployment rate up 0.6 percentage points to 7.2%. This drop in employment exceeds any monthly decline during the previous economic downturns of the 1980s and 1990s.
More jobs were lost in January than in November and December 2008 combined, when the economy shed 105,000 jobs (again mostly full-time). January’s employment drop is more than triple what the private sector forecasters expected (40,000) and comes to over one third of TD Canada’s recent projection of 325,000 job losses in 2009. With unemployment currently at 7.2%, it seems likely that we will reach 8% much sooner than the end of the year. At this rate, I wouldn’t be surprised if we got there by the end of the first quarter.
This is as strong an indication as any that we are in for a much tougher recession than what private sector forecasters are anticipating and that the week-old stimulus package contained in the Federal Budget is far short of what is needed. Parliamentary Budget Officer Kevin Page has already questioned the size of the stimulus and is quoted in this Globe and Mail article saying that the Tory stimulus package is likely to create 120,000 jobs rather than the advertised 189,000. That’s fewer jobs than were already lost in the first month of this year!
It’s time to see Mr Flaherty live up to his budget-day commitment to “do whatever is necessary” as the recession deepens fast.