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Canadian employment growth continues – but soft spots remain

Construction work being done on a condominium construction site at Bathurst Street and Fork York Blvd. in Toronto on May 29, 2012.

Deborah Baic/Deborah Baic/The Globe and Mail

The Canadian economy has created jobs for four months in a row, with the labour market composition tilting to private companies and the self-employed as the public sector sheds workers.

Employment grew by almost 22,000 jobs last month, Statistics Canada said Friday, and the jobless rate stayed at 6.9 per cent.

A closer look shows some soft spots. Almost all of November's increase was in part-time positions; hours worked decelerated in the month and young people saw job losses. The pace of hiring so far this year is running at about half last year's rate.

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"The longer you look at it, it gets less and less strong," said David Watt, chief economist at HSBC Bank Canada.

He tends to scrutinize hours worked, rather than the headline numbers, as a reflection of the labour market's strength. They fell 0.2 per cent last month and are lagging growth in gross domestic product on an annual basis, suggesting "we don't have a lot of underlying momentum."

Most economists don't expect a huge burst of hiring in the coming months; nor do they see contraction.

Canada's economy isn't seen picking up speed until later next year amid sturdier Canadian and U.S. confidence.

The country's private sector is responsible for most of this year's job growth. It added 31,400 positions last month, while the public sector shed 28,800 and self-employment grew by 19,100. This year, private employment has risen 1.6 per cent, self-employment is up 1.3 per cent and the public sector has contracted 1.2 per cent as governments trim budgets.

The mood of employers? Throughout this year, the sentiment "has been a cautious approach with regards to hiring," said Dave King, Canadian president of Robert Half Management Resources.

Employers are taking much longer to make decisions, carefully vetting each candidate and weighing whether to hire on a permanent or interim basis, he said, adding that it has been difficult for many to get a clear reading on the economy's direction. Competitive pressures and constrained corporate profits could put a damper on private-sector hiring. A string of companies have shifted into job-cut mode in recent months – from Potash Corp. of Saskatchewan to Sears Canada and Sun Media – while manufacturers in Ontario, such as H.J. Heinz and CCL Industries, have shuttered plants.

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Some employers currently in hiring mode are Alberta Health Services, Target, CIBC and Vancouver Island Health Authority, according to data compiled by Adzuna Canada for The Globe and Mail. The highest number of online job listings per capita at present is in Alberta, along with Prince Edward Island. The average posted salary is $49,719, with Alberta well above that average and Ontario below it.

The biggest shift last month was in wages. Average hourly wages of permanent employees accelerated 2.3 per cent from a year earlier, a seven-month high, from the prior month's pace of 1.7 per cent. Even so, the jump isn't enough to spur inflation, which is sitting well below the Bank of Canada's target range, noted Francis Fong, economist at TD Securities.

The health of the jobs market differs across the country. The most job creation has been in Alberta, percentage-wise, while British Columbia has lower employment than a year ago. Construction, business services along with accommodation and food are adding to payrolls, while public administration and factories have cut jobs.

Older workers continue to see employment gains, of 22,000 last month, while jobs rose by 26,000 among core-aged workers, led by increases for men.

Young people saw 26,400 fewer jobs in November, leaving employment at the same level as a year ago, the agency said. Their jobless rate stayed at 13.4 per cent as fewer sought work.

Productivity is improving, a little. Labour productivity rose 0.2 per cent in the third quarter, Statscan said in a separate release Friday, after a 0.4-per-cent second-quarter gain.

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"The recent up-tick in productivity – albeit moderate – is very much welcomed in Canada, given recent competitiveness challenges," TD noted.

National unemployment rate (%)

SOURCE: Statistics Canada

Unemployment rate (by province)

SOURCE: Statistics Canada

Unemployment rate (by age group)

Men and women

SOURCE: Statistics Canada

Youth unemployment rate over time (15-24-year-olds)

Men and women

SOURCE: Statistics Canada

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About the Author

Tavia Grant has worked at The Globe and Mail since early 2005, covering topics from employment and currency markets to trade, microfinance and Latin American economies. She previously worked for Bloomberg News in Toronto and Zurich, writing on mining, stocks, currencies and secret Swiss bank accounts. More


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