Expect ‘significant pressure’ from oil shock in latest job numbers

Employment data out Friday will likely show deeper job losses in Alberta and elsewhere as “second round effects” ripple through labour markets.
Employment data out Friday will likely show deeper job losses in Alberta and elsewhere as “second round effects” ripple through labour markets. Credit/GETTY IMAGES

Job market watchers are eagerly awaiting the latest employment numbers set to be released by Statistics Canada at the end of the week.

At last check in January, the bite of the oil price shock had sunk its teeth deeper into the job markets of Canada’s oil-producing provinces, with Alberta posting its worst unemployment rate in decades.

Despite a modest recovery in the price of oil through February, the economic pain stemming from crude’s 63 per cent drop over the past two years continues to reverberate.

“The energy sector remains under significant pressure and layoff announcements have continued … while second-round effects in oil producing regions will likely weigh on employment as well,” Benjamin Reitzes, an economist at Bank of Montreal says.

BMO suggests labour force data released on Friday will show payrolls growing by about 5,000 positions overall last month, but that will almost exclusively be because of job growth in B.C. and Ontario.

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“Better performing regions – namely B.C. and Ontario – should continue to see improved job growth, reflecting their more robust economies,” Reitzes said.

Alberta’s unemployment rate jumped four tenths of a percentage point in January to surpass the national average for the first time since 1988. Experts suggest the province’s jobless rate will peak at eight per cent later this year before beginning to fall again.

MORE: EI claims are rising fast in oil-producing provinces 

Confidence sapped

The resource downturn is also sapping confidence among households in the hardest hit regions, compounding the slowdown as uncertain consumers rein in spending.

The Conference Board of Canada says its consumer confidence index hit a new all-time low in Alberta, falling 3.8 points to 30.4.

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In contrast, the national index climbed 3.7 points in February to 83.7 – the first gain in three months.

MORE: Job seekers are flocking to Ontario, B.C. for work again

The results were led by rising optimism in Ontario, Quebec and B.C., as confidence fell in Atlantic Canada, the Saskatchewan–Manitoba region and Alberta.

Ontario gained 7.6 points to 91.8, while Quebec added 4.1 points to reach 93.4.

The Ottawa-based think-tank says Alberta’s view on current finances and future job prospects declined compared with January.

— With files from The Canadian Press

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