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UPDATE: Fewer young people working despite booming labour market

(Stock image)

(Stock image)

Peter Kovessy
Published on May 11, 2012
Published on May 11, 2012
Peter Kovessy  RSS Feed

The National Capital Region added more jobs in the first four months of this year than in all of 2011, according to Statistics Canada.

Topics :
Ontario

Following a strong first quarter, employers in Ottawa-Gatineau created 3,600 net new positions in April, bringing the year-to-date total to nearly 20,000 additional jobs.

That's on top of the roughly 12,200 net new jobs the local economy added in 2011, according to Statistics Canada analyst Vincent Ferrao.

"It looks very positive," he says.

"We've had fairly decent growth in employment."

The job growth this April couldn't keep up with an increase in the local labour force, which meant the unemployment rate increased by 10 basis points to 6.1 per cent.

Compared to April 2011, there are 26,900 more people working in Ottawa-Gatineau today, not adjusting for seasonal fluctuations. More than 70 per cent of those new jobs are full-time positions, says Mr. Ferrao.

However, it appears young people may be missing out of the local labour market boom. There are 2,000 fewer people between the ages of 15 and 24 working in Ottawa-Gatineau compared to a year earlier.

April was the first month that federal civil servants began receiving notices that their jobs were "affected" by cutbacks in this year's federal budget and could be eliminated. Approximately 4,800 local public service jobs are expected to be eliminated as a result.

Even before the budget, however, the number of local public administration positions was in decline. That trend continued in April, as there were 1,600 fewer people working in the sector compared to a year earlier, bringing the total down to 168,500.

The region's closely watched technology sector showed signs of strength, adding 4,100 jobs year-over-year to raise the total to 47,500.

The highest growth was in the professional, scientific and technical services category, which is up by 9,000 jobs compared to a year earlier. The health care and social services sector added 8,000 jobs, as did the information, culture and recreation category.

Nationally, Canada booked its best two-month jobs gain in three decades with news that the economy churned out 58,200 new jobs in April as Canadians found work in most regions of the country, many in the high-paying manufacturing, construction and resource industries.

Combined with March's 82,300 jobs number, the 140,500 total is the best two-month employment performance the country has seen since 1981.

The unemployment rate edged up one-tenth of a point to 7.3 per cent, but that was because even more people went looking for work last month, a signal of labour market strength rather than weakness.

"Wow. Where did this come from?" said Bank of Montreal economist Doug Porter.

"It's almost like Canada is a bit of an island in terms of good economic data recently."

The jobs trend, if confirmed in subsequent months, could give the Bank of Canada more impetus to start hiking interest rates, as governor Mark Carney suggested last week.

But many analysts still believe Mr. Carney will remain on the sidelines throughout 2012, given that the global environment is if anything worsening, particularly in Europe, and risks are rising.

Mr. Porter notes that the stunning two months of job growth comes at a time when the U.S. economy has shown signs of losing momentum, including on the jobs front, and Europe's troubles have mounted.

But analysts were quick to point out that if things seem too good to be true, they usually are. Some saw the two-month spurt as catch-up for what had been six previous months of almost no growth in employment when averaged out.

And they note that Statistics Canada's lesser-known labour market survey, which polls employers, had been reporting steady growth throughout the period when the more well-known household survey was showing flat or falling numbers.

Coincidentally, both now have 1.2 per cent jobs growth over the last year, although the employers' survey data is only to February.

"With this report, the lull of last winter has been all recovered and employment is right back to its trend. Thus, further improvements of this size are highly unlikely," said Jimmy Jean, economic strategist with Desjardins Economic Studies.

As impressive as April's headline jobs number was, the details were stronger.

Unlike the previous month, when most of the new jobs were concentrated in Central Canada, this time the gains were spread across the country with employment rising in the Atlantic region, Quebec and the West, although Ontario, Nova Scotia and Manitoba missed out on the action with minor job losses.

In Ontario, the unemployment rate increased 40 basis points to 7.8 per cent, which is still lower than in Quebec or in any of the Maritime provinces.

Also impressive was that most new workers were full-time and all were in the private sector, as well as being new hires rather than in the softer self-employment category.

In fact, the number of employees rose by 66,600, more than making up for a small loss of self-employed workers, and the private sector added 85,800 as government jobs fell by 19,200.

Over the past year, Canada has added 214,000 new jobs, more than half in the last two months.

By industry, Statistics Canada said construction added the most workers, 24,600, followed by manufacturing, 23,800 - welcome news in an export-dependent sector that has been struggling due to weak foreign markets and the high Canadian dollar.

Other gainers in April included natural resources, 11,000; agriculture, 10,000; and education services, 17,000.

Offsetting the gains, public administration shed 32,400 workers, likely an indication of government restraint.

Although Canada's unemployment rate at 7.3 per cent is still more than a full point above pre-recession levels, Statistics Canada inserted a historical note to show how much better Canada's labour market has fared since the recession and in the past decade compared to the United States.

From the early 1980s until 2008, Canada's unemployment rate was consistently higher than south of the border, it notes. But since 2009, the Canadian rate has been about 2.5 percentage points lower on average.

As well, Canada now has a greater number of workers as a percentage of the working-age population than the U.S., a reversal of pattern than existed prior to 2002.

"In April, the employment rate was 62.6 per cent in Canada when adjusted to the U.S. concepts," the agency said. "This was 4.2 percentage points higher than the comparable rate of 58.4 per cent in the United States."

-With reports from The Canadian Press

Comments

  • Username
    Frank Ly
    - May 11, 2012 at 13:52:15

    Has language been looked into as a factor? There are only so many bilinguals in this city, which has 500,000 unilingual English by the way.

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