Canada’s jobless rate has ebbed to a five-year-low, reflecting solid job creation in some sectors and – in September’s case – fewer young people looking for work.
The labour market has added about 12,000 jobs a month on average this year, a far-from-blistering pace but enough to send the unemployment rate down to 6.9 per cent. It hasn’t been this low since December 2008. Employment has risen in four of the past six months, with gains on both the goods and services side of the economy.
Some economists see signs the jobs market is on firmer footing – backed by fresh evidence, in GDP and payrolls reports released last week, that the economy was getting stronger by the end of the summer.
“Finally, we’re getting some signs that Canada’s jobs market is on the mend,” said Emanuella Enenajor, economist at CIBC World Markets, who expects this Friday’s labour force survey to show that 20,000 new jobs were created last month.
That’s above the consensus forecast. The report is expected to show 12,000 new jobs with the unemployment rate moving up a notch to 7 per cent.
Behind that plodding rate of growth, there are a number of shifts. Here are three key trends in the jobs market, based on data from the labour force survey and Statscan’s payrolls report:
1. Wages are no threat to inflation. Average hourly wages of permanent employees were a muted 1.8 per cent higher in September than a year earlier. Weekly earnings have stayed below the 3-per-cent mark in the past half year, suggesting companies continue to hold a line on costs. As of August, average earnings were up 1.3 per cent from a year ago, according to payrolls data. The biggest increase was in administrative jobs, while in food and accommodation, which employs more than a million people, earnings are actually lower than a year ago.
2. The construction business has enjoyed a jobs boom. Construction has seen the largest employment increases in the past year, reflecting both a still-strong housing market and activity on the commercial side. Real-estate jobs are growing too, tallying one of the fastest rates of year-over-year growth. That said, construction hiring fell in September, and most economists don’t expect the spree to last.
3. Alberta is, no surprise, still hot. Alberta has seen the biggest employment growth in the country, at 3.7 per cent. Its jobless rate is tied with Saskatchewan for the lowest, at 4.3 per cent. The wage gap between Alberta and Atlantic Canada has reached nearly $6 an hour, the highest on record, Bank of Montreal noted last week.