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Economy Lab

Weak growth likely to nudge unemployment rate higher Add to ...

Canada's jobs market has still not fully healed from the recession -- but it's a far cry from the situation in Europe.

True, Canada's labour market still shows far too many young people out of work, soft spots in Central Canada (particularly Montreal and Toronto) and weak wage growth. Oddly, there seems to be labour shortages and labour surpluses at the same time.

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But we're nowhere near Europe. Canada's jobless rate is 7.2 per cent, matching the lowest rate seen in the recovery. The economy has churned out almost 200,000 jobs in the past year.

By contrast, the unemployment rate among the 17-country euro zone is a record 10.9 per cent, figures showed last week, and some economists think it will soon break 11 per cent. Surging joblessness is sparking anti-austerity protests across much of the region.

It's also causing a wave of migration as thousands of the region's well-educated, promising young people move to places like Australia, Mexico -- and Canada -- in hopes of work.

The unemployment rate in Spain is now 24.1 per cent, in Greece it's 21.7 per cent, Portugal 15.3 per cent and Latvia 14.7 per cent.

Canada's employment numbers have been bumpy of late – particularly in March, which saw a huge jump in hiring. Such surges are often followed by a pullback -- Desjardins economists predict a drop in April of about 10,000, sending the jobless rate to 7.3 per cent.

Beyond that, “monthly hiring should pick up in coming quarters, as factories ride the wave of resurgent auto demand,” said Emanuella Enenajor, economist at CIBC World Markets, in a note. “Hiring elsewhere should be modest, reflecting the tame 2.1-per-cent pace of economic activity -- holding the jobless rate at roughly 7.3 per cent this year.”

Statistics Canada releases its labour force survey on Friday. Economists polled by Bloomberg expect 10,000 new jobs were created last month, not enough to prevent the unemployment rate from rising a notch to 7.3 per cent.

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