Recession Far From Over
Today’s job numbers are a clear sign that, far from entering a recovery, the Canadian economy is still in free-fall.
This was the first month of the third quarter, the quarter in which the Bank of Canada expects positive GDP growth to resume .Â But, over the past two months, the number of employees has fallen by 124,000 or one in four of the 513,000 paid jobs lost since last October. If anything, the job market deterioration seems to be accelerating.
While the national unemployment rate remained unchanged in July at 8.6%, this was only because 53,000 workers gave up the fruitless search for jobs and dropped out of the labour force. The participation rate fell sharply, from 67.5% to 67.2%, the largest monthly decline we have seen since the recession began.
We lost another 45,000 jobs in July, but the picture is much worse on closer examination. There were 79,000 fewer workers in paid jobs compared to June, while self-employment rose by 35,000. This was on top of another big jump in self-employment of 37,000 last month.
Put it all together and the picture is of large losses in paid jobs, with the impact on the headline unemployment rate cushioned by workers giving up the search for jobs or turning to self-employment.
Today’s numbers show that the impact of the recession has spread decisively to women. There were 22,000 fewer adult women (aged 25 and over) working in July compared to June, and another 31,000 adult women dropped out of the labour force.
The figures suggest little impact to date from the federal government’s stimulus package. We lost 18,000 construction jobs in July, bringing the total loss in this sector since October to 120,000 or 9.6%.
The unemployment rate for students in July was 20.9%.