August’s hiring demand (tracked by Vicinity Jobs in Ontario’s York Region but representative of the general trend for most of Canada) soared to levels not seen since May 2008. Statistics Canada’s monthly labour market survey also points to a surprisingly strong August, although the unemployment rate remained unchanged as more people joined the labour force. These numbers come in a period when the US economy reportedly created a disappointing 96,000 jobs, the recession in the European economies seems far from over, and at home, the debt load of Canadian household remains at a record high.
First the good news: Hiring Demand (as illustrated below) grew to levels not seen since well before the economic collapse that took place in late 2008. The Vicinity Jobs hiring demand index measures the hiring activity of employers by analyzing jobs that are posted online. It is currently reported on a monthly basis in Ontario’s York Region, but the report’s findings have historically been consistent with the overall trends in Canada as a whole.
Our hiring demand index analysis also found that hiring demand growth was strongest in the retail industry, but was also quite solid in the manufacturing and professional services industries. And employers were looking to hire significantly more supporting admin and sales staff compared to previous months.
A report released by Statistics Canada for the same month also indicates that Canada’s economy created 34,000 new jobs, with British Columbia seeing the strongest growth with the creation of 15,000 jobs. Somewhat surprisingly, Ontario’s economy actually shed 25,000 jobs. In conjunction with the Vicinity Jobs report showing a record high hiring demand levels, this suggest a possible structural adjustment among Ontario’s employers: Many of them were looking to hire employees with the skills that they require, but many were also letting go employees whose skills are no longer needed.
Canada’s employment increases were in the transportation and warehousing industries where 37,000 new jobs were created after disappointing performance in previous months, and in the professional, scientific, and technical services industry (20,000 new jobs).
Now the bad news:
The growth was not balanced when it comes to the age demographics of the labour force: Employment increased for men and women aged 55 and over, while it was down almost 3% among youths. There were less summer jobs for students this summer compared to last.
Employment in the construction industry declined significantly, as Canada’s housing market is also showing some signs of cooling off. Employment in the information, culture, and recreation industry also declined – for the month as well as for the year.
South of the border, the US economy created a disappointing 96,000 jobs. Unemployment remained unchanged, but the level of participation in the labour force was at a low not seen for decades. This suggests that many more Americans than before are simply giving up on their job search.
Another report analyzing the consumer debt load of Canada’s households was issued by Moody’s Analytics – the economic large division of the large international credit rating company. It found that the debt-to-income ratio among Canadian households is at an all-time high of 150%. Moody`s estimates that there is a more than 20% risk that Canada may fall back into a recession. Much of that risk comes from outside of Canada’s borders, but the impact of the high consumer debt load should not be underestimated.
The European Union’s economy remains in recession and slowdown in China’s economic growth seems to be continuing.
The hiring demand and job creation numbers from August were good news that attest to the resilience of Canada’s economy. But until the significant domestic and international economic risks ease, we are unlikely to see strong continued employment growth in the coming months.