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Self employed consultant Tracey White working in her home office. (JENNIFER ROBERTS FOR THE)
Self employed consultant Tracey White working in her home office. (JENNIFER ROBERTS FOR THE)

Canada's job market in deep freeze Add to ...

The jobs market is frozen.

More than 43,000 Canadian jobs vanished in October, suggesting that after two consecutive months of gains, companies are waiting for more signs of a sustained recovery before they begin hiring again.

Canada's unemployment rate rose to 8.6 per cent, up from 8.4 per cent a month earlier, and a continued trend to self-employment shows the cold job market is forcing many to create their own work.

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But behind the bleak headline number that was released by Statistics Canada Friday, there is a subtle shift in the wind.

The economy has now added full-time jobs for two months in a row as part-time work receded, suggesting there are at least some signs of optimism. Also, higher-paying jobs were created in October in areas such as construction, while positions were shed in the lower-paying retail sector.

"The details of the report were mostly weaker, with the only positive news that the entire drop was in part-time jobs, while full-time positions recorded a decent gain," Benjamin Reitzes, an economist at BMO Nesbitt Burns, said Friday.



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Notably, the economy has now added full-time jobs for two months in a row. Part-time work, which had been on the rise as unemployment mounted in the recession, has fallen over the same period. And higher-paying jobs were created last month in such areas as construction, while the lower-paying retail sector shed positions.

A three-month average, which smoothes out monthly bumps, shows the economy creating about 4,800 jobs a month.

Compass Group Canada, a food services company of 22,000 people, for example, plans to hire, though slowly and gradually, a sign of the tentative nature of employers in a labour market where 400,000 jobs have been wiped out since employment peaked in October, 2008.

"We're confident the economy is recovering, albeit slowly," said Anita Binder, director of recruitment at Compass, which is planning to hire several hundred people for a range of jobs, but over the course of months.

"My sense is that businesses are starting to think about hiring again, but cautiously," said Bank of Montreal economist Michael Gregory, who believes job growth will pick up in the coming months as the construction, financial services and real estate industries expand and retailers gear up for the holiday season.



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The move toward full-time positions boosted the overall quality of jobs last month, said Avery Shenfeld, chief economist at CIBC World Markets, who expects more full-time job growth as industrial activity picks up in the coming months.

Loblaw Cos. Ltd., for example, is deliberately shifting more of its employees to full-time work, with a target of converting 10,000 positions over the next several years.

The move is aimed at improving productivity and customer service, based on the view that full-time staff feel more committed to their jobs and the company, president Allan Leighton told investors earlier this year. It also will reduce staff turnover, which among part-timers is roughly 50 per cent every three months.

Still, worries remain. Observers believe the unemployment rate will rise further as more people look for work and hiring stays sluggish.

Youth, in particular, have been smacked by the recession. Youth unemployment is running at 15.6 per cent and the 15 to 24 age group has lost far more jobs in the past year than adult men or women. It's a trend occurring across the developed world.

"I would say [youth]are the biggest losers of this recession in terms of the job market," OECD Secretary-General Angel Gurria said in an interview from Paris.

Another question mark is self-employment.

Self-employment has soared 3.9 per cent in the past year, and that trend continued last month. About 2.8 million Canadians are now self-employed, or about 16 per cent of the total employment picture, a higher proportion than historical norms.

Tracey White, who just started her own Toronto-based business consultancy, knows her cash flow may take a temporary hit. But after a year of fruitless job searches following the abrupt end of an employment contract, she made the leap three weeks ago and has already landed a U.S. client.

"There's a lot of change going on in our economy and restructuring that people don't have their heads wrapped around," Ms. White said. "It's a really uncertain time because people don't know how things are going to shake out. But hopefully that will give me great opportunities."

With files from reporters Brodie Fenlon and Marina Strauss.

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