Canada’s Economy Lost 54,000 Jobs in October – Primarily in Ontario

From Brittney Windatt and Strac Ivanov  

Following an increase in September, Statistics Canada reports an employment decline of 54,000 in October – all in full time, and predominantly in Ontario.   October’s loss pushed the unemployment rate up 0.2 percentage points to 7.3 percent.

  

Year-over-year, total employment has risen by 1.4 percent due to increases in the months before October.   The number of full-time workers declined by 72,000 on October; however, year-over-year, full-time employment has grown 1.6 percent compared with the same month a year earlier.   It should be noted, however, that unemployment has remained above 7% ever since it shot up in 2008 – and now may be on the rise again. Until October 2008, unemployment had been hovering around 6% – which many economists consider to be the natural unemployment rate.

October’s job losses were predominantly in the private sector.   Provinces to experience employment loss for the month of October are Ontario, British Columbia, Nova Scotia and Prince Edward Island, while Newfoundland and Labrador experienced an increase in employment.

For the second consecutive month according to Statistics Canada, a majority of the decline in October occurred in manufacturing, down 48,000 for October and 2.7 percent compare with October 2010, followed by construction.   Despite the decline for the construction industry, employment stood 1.4 percent above the level of October 2010.   Employment in natural resources was the only industry to post notable gains for the month, experiencing a gain of 12,000.   Over the past 12 months, natural resources employment has grown by 5.0 percent.

In the past 12 months to October, employment in the goods sector has fallen 0.7 percent, with growth earlier in the period dampened by declines in recent months.   In contrast, employment in the service sector continues on its long-term upward trend, growing 2.0 percent since October 2010.   Experiencing the most growth is accommodation and food services, up 8.2 percent, followed by transportation and warehousing, up 3.7 percent, health care and social assistant, up 3.4 percent, and professional, scientific and technical services, up 3.4 percent.   The service sector saw no notable changes for October.

Among provincial changes, Ontario’s employment declined by 39,000 in October, with large losses in full time partially offset by gains in part time.   The unemployment rate in Ontario rose by 0.5 percentage points to 8.1 percent, and over the past 12 months, employment in Ontario has grown by 1.5 percent.   Employment fell by 11,000 in British Columbia.   Since October 2010, employment in B.C. has grown by 0.9 percent.  

Demographically, October saw a decline of 32,000 in employment for adult women.   While youths experienced a slight loss in October, employment growth of 1.9 percent for this group over the past 12 months has outpaces the national average.  

The unemployment increase comes on the heels of troubling economic news from Europe – where Greece and increasingly Italy seem unable to cope with their huge sovereign debt load.   In response to the worsening global economic situation, Canada’s government recently pushed out its projected timeline for balancing its budget and announcing reductions in the planned increase of EI premiums. A new recession is becoming more likely, as the deepening European crisis is unlikely to leave Canada untouched.