Jobs surge in September, but concern grows over quality

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It's a seemingly glowing economic picture: two solid months of job creation, with most of the employment gains of the past year in full-time positions, and in the private sector.

And the headline number of 52,100 jobs created in September puts Canada on much more solid footing than most of its peers, at least at first glance.

Take a closer look, however, and last month's jobs picture glows a little less. For one, construction accounted for many of the new jobs, snapping back after a record drop a month earlier. The outlook for construction hiring is tepid as the housing sector softens.

Another big factor behind the job gains in September is self-employment – jobs which economists tend to view as having typically lower wages with fewer benefits. The number of self-employed people rose by 33,800 last month.

"For an economist, it's not the same quality of jobs compared to public or private employment," said Matthieu Arseneau, senior economist at National Bank Financial in Montreal.

Despite a recent spurt of hiring, "many people still find it a challenge to locate those high-quality, high-paying jobs," said Jim Geraghty, president of Happen, a network for job-seeking managers and executives. "Consequently, many have chosen to go the self-employment route."

It's too early to know whether the jump is a one-month blip or the start of a longer trend. Self-employment levels are still below where they were a year ago.

Jobs – and the quality of them – was one of the key themes in a Bank of Canada speech this week by senior deputy governor Tiff Macklem. He noted that more than 90 per cent of new jobs since 2009 have been in sectors that pay average, or above-average wages, in industries like health care and professional services.

Still, while there are many ways to slice and dice labour market numbers, the key measure – the country's jobless rate – still shows slack.

The country's jobless rate rose a notch, to a seven-month high of 7.4 per cent as more people looked for work, Statistics Canada data show. It remains well above pre-recession levels.

The current pace of hiring will likely ease, Mr. Arseneau said.

Mr. Arseneau cited manufacturers grappling with global pressures, the construction industry slowing and the public sector trimming budgets as factors in a slowdown in hiring.

The jobs picture for youth hasn't improved, despite employment gains among other age groups. The jobless rate for young people rose to 15 per cent in September and employment has fallen by 70,000 in the past year.

"Youths are the only demographic group that have not recovered from the employment losses observed during the recession," the agency said.

Among sectors, retailers added 34,000 positions last month while the construction industry created 29,000 jobs, reversing a record loss in the prior month.

Hiring agency Randstad Canada is seeing increases in both contract and permanent demand – particularly in the auto industry, along with logistics and computer software, said president Jan Hein Bax, who is seeing more skills shortages in areas like engineering, automation and skilled trades.

IKEA is one of the companies in hiring mode. The retailer is looking to hire 1,000 people in the next year in places like Winnipeg and Montreal, adding to its current head count of 4,000.

The home furnishing firm is looking for cashiers, along with store-level managers, interior designers and customer relations workers.

The economic climate is "stable," said Cory Randles, vice president of IKEA Canada. "We've been attracting customers who'd been shopping at a higher price point, so we've been able to take some market share."

The company has been flooded with applicants, reflecting still-high numbers of job seekers – 46,000 applications in the past year. A Winnipeg posting in June seeking 300 workers garnered 5,000 online applicants.

Hiring in other sectors was mixed. Natural resources trimmed head counts in September, while factories have shed jobs for four months in a row, a reflection of a high dollar, uneven demand and competitive pressures.

Wage pressure eased, after bumping higher in recent months. Average hourly earnings increases cooled to 3.4 per cent from a year ago, from 3.8 per cent in August.