Jobless Canadians and others looking for signs the economy is gaining traction aren’t likely to take any solace from Statistics Canada’s newest jobs numbers.
According to Bloomberg, economists are predicting that the release of August’s Labour Force Survey on Friday will show a paltry gain of 20,000 jobs for the the month, which will keep the unemployment rate steady at 7.2 per cent.
The unemployment rate hasn’t fallen below 7 per cent since December, 2009.
Any gains seen in July are more of a reversal of the month previous, which saw an unexpected loss of 39,000 jobs, said Benjamin Reitzes, senior economist at BMO Nesbitt Burns.
“I would expect some kind of sizable rebound in health care because it is generally a growing sector so you usually don’t see meaningful declines,” he said “If there are any, they’re likely to be quickly reversed.”
Mr. Reitzes is a little more bullish than the consensus view, forecasting an increase of 35,000 jobs for the month, which he predicts will drop the unemployment rate a tick to 7.1 per cent.
With schools staffing up for the start of the academic year economists are also predicting education employment to trend up, after losing 16,000 jobs from June to July.
Normally those kinds of seasonal fluctuations are smoothed out by Statistics Canada, but changes in hiring patterns by school boards, which are shifting to shorter contracts, has Statistics Canada playing catch-up, said Paul Ferley, assistant chief economist for Royal Bank of Canada.
“It’s a new kind of seasonal pattern that’s emerging,” he said.
Mr. Ferley is also a bit more optimistic than average, predicting an increase of 30,000 for the month and a drop in the unemployment rate to 7.1 per cent.
August could also see a bump in construction employment from rebuilding efforts in flood-stricken Alberta, noted Mr. Ferley. Mr. Reitzes is more cautious about the prospects for that sector.
“Construction should start trending flat to lower,” Mr. Reitzes said. “It needs to shrink its share of employment, but housing has been exceptionally resilient, so I’m reluctant to be too negative on them.”
Over the next year, Mr. Ferley predicts modest employment growth of about 22,000 jobs a month with the unemployment rate falling to 6.5 per cent.
But for younger workers it’s likely going to be tough for some time to come, said Francis Fong, an economist with the TD Bank.
Although 15- to 24-year-olds only make up about 15 per cent of the overall labour force, they account for 30 per cent of the country’s unemployed. And although almost a million jobs have been added to the Canadian economy since the end of the financial crisis four years ago, younger workers have seen almost no change in their unemployment rate, Mr. Fong noted.
The good news is that prospects for young workers will eventually improve, but the bad news is it will still take some time, he said.
“If you look back to the 90s recession – which you could argue that it was even worse than it is today – job gains didn’t happen for that age cohort until 1997, which was essentially six years after the recession had ended in mid-’91,” Mr. Fong said. “This is sort of par for the course.”