Canada’s Unemployment Unchanged in April As Hiring Demand Recovers

In the late months of 2012, I started warning that the job market growth reported in Statistics Canada’s labour market surveys may be unsustainable. Our own Vicinity Jobs hiring demand research, which analyzes online job postings, showed that the numbers of new jobs advertised had fallen to levels we had not seen in years. I speculated that employers may be holding back layoffs rather than creating new jobs.


Then something interesting happened: Canada’s economy lost jobs and unemployment increased in March as I had expected – but at the same time, our own reports showed that hiring demand was starting to pick up. So I suggested that if hiring demand holds up, this may keep unemployment from increasing significantly.


The results of April’s labour market survey (released on Friday, May 10th 2013) suggest that this is now happening. Unemployment remained unchanged after the drop in April, and the economy even regained some 12,500 of the 54,500 it had lost in March. And while, on balance, the number of jobs in Canada has hardly grown since December of last year, there are some signs that better times may lie ahead.


There are two reasons for my cautious optimism regarding the short-term prospects of the job market: The state of the US economy and Canada’s hiring demand levels.


So far, at least, it appears that the US economy has been damaged less than many had feared by the tax increases that took place at the beginning of this year and by the government spending cuts that started in March (the so-called sequester). The US economy`s performance can hardly be described as “stellar”, but the mere fact that it has not gotten into a decline in spite of these drastic measures seems to vindicate those who argued that it is actually in a pretty good shape. This comes with an important caveat though: While the effect of the tax increases should be quite evident by now, the full impact of the sequester is yet to materialize. Most of the affected government agencies are only starting to cut their budgets, and layoffs and procurement changes take time to implement.


Canada’s hiring demand level also remained healthy in April. It did retreat slightly from the March levels, but this is due to seasonal trends (hiring demand is usually weaker in April than in March). Overall, April was the first month of 2013 in which hiring demand caught up with the levels from the same time last year. If this trend continues, unemployment will likely to decline.


So the question now is: Will Canada’s employers continue hiring?


Over the medium-to-long term, Canada’s structural imbalances will prevent strong economic growth. This in turn will keep a lid on hiring demand. Record high household debt (fueled in part by inflated real estate prices) means that Canadians must save more and spend less. We are already seeing the effect on the job and real estate markets, in the form of a softening real estate prices and demand and a decline in the hiring demand from retailers. This trend will continue and will likely accelerate once interest rates start to rise (which is unlikely to occur in the very near future, but cannot be avoided in the medium term).


Another issue is that the long-term prospects for Canada’s largest industry – manufacturing – remain cloudy. Manufacturing actually created 21,000 new jobs in April, but this came after a downward trend that lasted for 9 months. As a result, the number of manufacturing jobs in Canada is still 2.9% lower than it was 1 year ago. Other industries – including the oil and mining – do not have the breadth and growth potential to replace manufacturing as a source of employment and overall wealth. An improvement in the state of the US economy may give a short-term boost to Canada`s manufacturers. But over the long term, Canadian manufacturers need to become more competitive in order to survive. This requires being more productive, which in turn requires businesses to innovate faster. Many studies show that Canadian businesses lack their US counterparts when it comes to innovation. This will not turn around overnight.


On top of that, the international environment may be on a less stable footing than catches the eye. It is easy to forget that the US Federal Reserve (the US central bank) has been running its so-called QE policy for about 4 years now (QE stands for Quantative Easing). The policy involves stimulating the economy by printing and pouring into it large amounts of new money. The measure was originally meant as a short-term emergency measure to unfreeze the credit markets, but there are concerns that the US economy may hay have grown addicted to it (which is one of the reasons why the Federal Reserve has been reluctant to discontinue it). So far QE has not resulted in inflation, but economic theory teaches that it might (and likely will) at some point in the future. It is clear that QE must be withdrawn at some point, along with some of the newly printed money. It is not clear how the US economy will react to such “squeeze”. And in spite of many companies reporting record profits, sales revenues have been lagging.


So companies have been cutting cost to achieve their record profits, rather than selling more. As a result, unemployment in the US still remains at unusually high levels by historic standards.


In spite of all this, there is no denying that the economy seems to be weathering the challenges that it faces better than most analysts expected. Whether it will continue to deliver positive surprises remains to be seen.


written by Strac Ivanov, M.B.A., President of Vicinity Jobs Inc

The Tough Economic Reality Caught Up with Canada’s Job Market in March

Until March, Statistics Canada’s reports were painting a pretty rosy picture of Canada’s job market. In my blog posts from the past few months, I wondered where the employment growth was coming from. Last month, I suggested that Canada’s employers may be simply delaying layoffs to see where the economy is going. We (Vicinity Jobs) recorded a weak hiring demand levels since last October, and I predicted that unemployment will start creeping up again in the very near future unless the economy turns around. In March, Canada’s economy lost 55,000 jobs, and unemployment increased 0.2 percentage points to 7.2%.

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Canada’s Economy Created 34,000 Jobs in August as Hiring Demand Soared

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.

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July’s Unemployment Growth May Signal More Trouble Ahead

Canada’s economy lost 30,000 jobs in in July 2012, pushing the unemployment rate up 0.1% to 7.3%. The Statistics Canada labour survey report for July shows that most of the jobs lost were part-time, and among women aged 55 and over. The losses were concentrated in a handful of provinces, including BC, Quebec, and Manitoba, while employment remained unchanged in most other provinces, including Ontario and Nova Scotia.

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Employment Growth in Ontario in November Overshadowed by Declines in Most of Canada

Statistics Canada released its monthly Labour Market Survey for November. It shows that, following a notable decrease last month, Canada’s economy lost 19,000 jobs again in November, raising the unemployment rate to 7.4 percent.   However, despite recent declines, employment still remains up 1.2 percent from November 2010.   And in Ontario, employment actually increased, and unemployment declined. Continue reading Employment Growth in Ontario in November Overshadowed by Declines in Most of Canada

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.

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Disappointing Job Market Performance in November in both Canada and the United States

On the face of it, the headline of the Statistics Canada labour market report for November sounded great: Unemployment dropped 0.3 percentage points to 7.6 % and is now at its lowest level since January 2009. But a closer look reveals that there is less substance behind this number than meets the eye. And those who were hoping that the numbers from South of the border would look better were bitterly disappointed as well.
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Free Seminar for Employers Looks into the Challenges Involved In Recruiting and Hiring Immigrants

Our community partners at Sheridan College are hosting a free workshop for employers titled “Are you ready? on November 24th 2010, in partnership with the other Greater Toronto Area (GTA) community colleges, including Centennial, Durham, Humber, George Brown, Seneca. This is a full-day workshop, dealing with the challenges involved in effectively recruiting and hiring qualified immigrants. It is designed to help employers to improve their cultural competence by:

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