On Thanksgiving, Canadians can be thankful that public stimulus spending propelled a surprisingly strong labour-market rebound in September. This morning’s release shows full-time employment up and the unemployment rate down. However, the jobs picture is not as rosy as these top-line numbers imply.
The improvement in Canada’s labour market should not be taken as an indication that government stimulus is no longer needed. Rather, it suggests that much-delayed stimulus spending may finally be having a positive effect.
All of September’s job gains were in the public sector. The total number of private-sector employees declined. This decline was outweighed by a small increase in self-employment and a larger increase in government employees.
Increased employment in construction and manufacturing offset decreased employment in services. A possible interpretation is that the sectors affected by public infrastructure projects strengthened, while those dependant on Canadian consumer spending faltered.
In addition to these sectoral disparities, there were significant gender and regional disparities.
Total employment, and especially full-time employment, declined among adult men. All of the net job gains were among youth and adult women, which may partly reflect the concentration of female employment in the public sector. Despite initial rebounds in male-dominated industries like construction and manufacturing, the “he-cession” is far from over.
Gains were also concentrated west of the Ottawa Valley. Full-time employment increased appreciably in Ontario and every western province but Manitoba. East of the Ottawa Valley, significant losses of full-time jobs in Quebec, Nova Scotia and Newfoundland and Labrador outweighed smaller gains in New Brunswick and Prince Edward Island.
The key question for workers who are unemployed, or at risk of becoming unemployed, is whether they can find another job. Today’s figures make the outlook a little less negative.
However, it is worth noting that two-thirds of the increase in full-time employment was a (welcome) conversion of part-time jobs into full-time jobs. Only one-third translated into an increase in the total number of jobs.
Half of the decrease in official unemployment reflected this employment increase. But the other half reflected a reduction in the labour force. While some workers found jobs, others gave up hope and exited the labour market altogether.
UPDATE (October 10): Quoted by The Toronto Star
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- Youth Still Stuck in the Recession (Dude, where’s my job?) (May 10th, 2013)
- Labour Force Participation Below Two-Thirds (May 10th, 2013)
- Crowley’s Red Hot Labour Market (April 22nd, 2013)
- A Weak Week for Canada’s Economy (April 19th, 2013)