The country’s job market posted a lukewarm performance in September, with more out-of-work Canadians encouraged enough to begin searching for employment again, but with many employers not exactly rolling out the welcome mat.
As Doug Porter, chief economist at BMO, noted, the number of employed workers rose by 12,100 last month. “But, and it’s a big but, the details of the report were mostly on the soft side.”
Statscan’s jobs snapshot comes at an important time for politicians and policymakers alike, with an election and interest-rate decision staring both in the face this month.
Here’s what experts are saying about the monthly labour report, and what it means for everyone from Stephen Harper, to mortgage brokers to you and your job prospects.
Oil shock resilience
“The labour market continued to withstand the oil price shock in September, creating a moderate net gain of jobs,” David Madani, economist at Capital Economics said.
Indeed, somehow, some way, Alberta – home to the bulk of the country’s battered energy sector – managed to add 12,300 jobs last month.
People from other provinces continue to flock to Alberta in search of work, while more in the province said they were looking for a job last month – the main reasons why the provincial unemployment rate jumped fully half a percentage point to 6.5 per cent.
Yet the resource sector, where oil jobs are counted, only shed 2,600 positions in September.
Still, Madani suggested there’s more pain to come. “Energy producers are still in the process of slashing investment plans, so the worst of the oil shock is likely ahead,” he said.
You may be aware of a federal election taking place in exactly 10 days from now. September’s languid report likely won’t win the Conservatives any additional points for their economic stewardship claims.
“The last employment report before the federal election has to be disappointing for the Harper campaign,” Sherry Cooper, chief economist at mortgage broker Dominion Lending, said.
The Bank of Canada is also scheduled to announce its latest interest rate decision two days after the election. The current trend-setting, overnight rate sits at 0.5 per cent, a rate that’s been halved since the start of the year as economic conditions have faltered.
Today’s job numbers weren’t weak enough to move the needle on the bank’s stand-pat position right now, experts said.
“From the Bank of Canada’s perspective, there was little in today’s report that is likely to change their thinking,” TD said. “The Bank is unlikely to move interest rates any time soon.”
The headline gain masked some meaningful weakness in the job mix though, according to experts. The job gains were entirely among part-time workers – up 74,000 jobs — and self-employed – up 30,800.
In contrast, the number of full-time jobs declined 62,000 while payrolls among employers actually shrank by more than 18,000 last month. Read: less stable jobs rose in number while higher quality positions were eroded.
‘The details weren’t anywhere near as good as the headline employment gain’
“The details weren’t anywhere near as good as the headline employment gain,” Mandani said, adding that some job seekers are likely identifying as self-employed rather than out of work.
A rise in the ranks of self-employed is “sometimes a sign of a job market that’s forcing people to hang up their own shingle,” CIBC chief economist Avery Shenfeld said.
And despite the headline gain, the jobless rate rose – reflecting a job market where more jobless workers are searching for employment.
Unemployment climbed a tenth of a percentage point to 7.1 per cent in the month. “That’s the first time since 2009 that the unemployment rate has been above year-ago levels – not good,” BMO’s Porter said.
Boomers crowd out
Recent retirees and other Baby Boomer types – newly self-employed consultants for example – accounted for almost the entire bump in employment last month.
“It was little changed for other demographic categories,” Dominion Lending’s Cooper said. “Clearly, many boomers prefer to continue working either by necessity or choice – probably a combination of both.”
West was best
Employment gains were registered in all provinces but Ontario and Newfoundland, the former shedding 33,800 jobs.
“The provincial breakdown showed that most of Western Canada added jobs in September, even as the slump in oil prices and business confidence with it have darkened the outlook,” Madani at Capital Economics said.
A long-awaited industrial revival didn’t materialize last month in Ontario, whose long ailing factories should be benefitting from the loonie’s drop. Yet factory jobs are up a paltry 2,700 overall year on year.
“Employment in manufacturing was largely unchanged, reflecting the fact that production has been going sideways despite the potential benefit of a lower Canadian dollar,” Madani said.