What can you say about the second-best job-creating month in Canadian history – other than, "Wow, that's a lot of jobs"?
Well, lots of stuff. Any monthly jobs report has its quirks, and one this far out of the box has more than its share of them. Some hard to explain, some even a little worrisome. Let's peel back the lid of Canada's 95,000-job May and see some of the odds and ends inside.
The margin of error
Statistics Canada recently began including "standard error" in the tables of the employment report. Essentially, it's the amount by which the report could be over- or under-stating the numbers – the statistical accuracy of a relatively small labour force survey from which the data for the entire national population are estimated.
For May, Statscan said, the 95,000-job figure could be out by as much as 28,700, plus or minus, two times out of three. Two times out of three isn't good enough for you? Then 19 times out of 20 the job number would fall within double that standard error, or plus-or-minus 53,400.
This isn't an admission that the gangbuster May number is flat-out wrong – though when you're at the top of your historical range, it's hard not to believe that the margin of error wouldn't skew to the downside. In fact, as University of Ottawa economics professor and Economy Lab contributor Miles Corak wrote earlier this year, Statscan has long published its margins of error in the fine print of the labour force survey. It has decided to bring the numbers more into visibility now, but the May statistical error is not particularly unusual.
Regardless, as Statscan points out, changes bigger than the sampling error typically reflect real and significant changes in employment, rather than statistical aberrations. Even if the survey over-estimated job gains by the full 53,400, May was still a big month for job growth.
The bigger-picture trend
There's a danger in reading too much into a single month of data, whether it be jobs or any other economic indicator. Looking at the general trend over the past several months gives a better sense of the underlying momentum.
In the case of the employment numbers, May is a dramatic break from several months of mediocrity. It may be a case of an economy turning a corner – or maybe just an economy playing catch-up after several months of sluggish hiring had created some pent-up demand. Even after May's big number, average monthly job creation so far this year has been a modest 16,400; the average over the past three months has been 17,700.
Manufacturing still AWOL
The one big negative in an otherwise bullish jobs report was the manufacturing sector – again/still. Manufacturers shed 14,200 jobs in May, by far the worst performance among goods-producing sectors. Manufacturing employment has fallen in seven of the past nine months. Over the past year, the sector has lost nearly 100,000 jobs; the rest of the economy has added nearly 350,000.
On the other hand, the construction industry sprang back to life – 47,000 new jobs added, and that's on a seasonally adjusted basis. Perhaps this is evidence that the long-awaited pick-up in business investment is picking up in the form of non-residential construction, and/or that the slump in housing starts is turning a corner.
The young and the old
Workers aged 15 to 24 saw a 54,000-job surge in May, pushing the youth unemployment rate down almost a full percentage point, to 13.6 per cent. However, in the first glimpse of the student summer job market, Statscan said the rate of both employment and unemployment for university-aged students (20-24) was little changed from a year earlier.
Workers 55 and older added 34,000 jobs in the month. Over the past 12 months, this age group added 142,000 jobs, a 4.2-per-cent increase. But don't get too excited about a job boom for seniors and near-seniors: Statscan said the increase is mostly a result of more workers simply aging their way into the cohort.
The so-called "core" age group for workers – 25 to 54 – saw virtually no job growth in May. Over the past year, core-age employment is up 60,000 jobs – hardly a rip-roaring market for the heart of the Canadian work force.