Monthly job numbers released by Statscan on Friday illustrate Canada’s emergent “two-speed” economy, where low oil prices are harming some regions, while conditions are improving in areas outside the energy and resource sectors.
October’s federal election created a lot of noise over the past couple of months, but filtering that out, experts say a picture is developing where diversified, industry-based regions are benefiting from a lower loonie and strengthening U.S. demand, while areas reliant on resources are straining under a dive in oil and other commodity prices.
Here’s five things to know about the November job numbers:
Most economists say the details of the report were not as weak as the headline number suggests, pointing to the loss of 32,500 public administration jobs as proof. These were almost certainly all connected to the federal election in October, and were largely expected.
“The decline occurred as hires made for the October 19 federal government election were laid off,” Dawn Desjardins, deputy chief economist at RBC, said.
After showing some impressive resilience through the first several months of the year, Alberta is labouring under oil’s long slide and is now clearly showing it.
Some 14,900 jobs were lost in the province last month – the biggest drop in the country. The jobless rate took another big step up, rising four ticks to seven per cent. Alberta’s jobless rate is now higher than Ontario’s, the first time that’s happened since the 1990s, Porter said.
Factory jobs were up a solid 17,400, and are now up 1.4 per cent from levels a year ago – illustrating how a weaker loonie and improving U.S. demand for Canadian goods is benefiting manufacturing intensive provinces, like Ontario and Quebec.
“The one truly good piece of news today is that manufacturing seems to be coming back in a meaningful way at long last,” Doug Porter, chief economist at Bank of Montreal, said.
“Looking past the election effect, underlying Canadian job growth is just grinding along at an achingly slow pace,” the BMO economist said.
Over the past year, jobs are up 124,000, or almost exactly 10,000 per month. Over that period, the labour force is up 209,000 or 17,500 a month. “So the economy is simply not growing quickly enough to absorb all the new entrants,” Porter said.
Combined with a weaker GDP reading for September, which was released Tuesday and showed the economy contracting in September, the outlook for employment and general economic growth in the months ahead is looking a tad dour.