Jobless rate to edge up
With just three provinces creating new jobs, unemployment in Canada is forecast to tick higher still.
“The labour market tends to lag the overall economy by one to two quarters,” Toronto-Dominion Bank economists said in a recent forecast.
“As such, the job losses among resource-heavy economies are likely to continue to mount through 2016 with the recession persisting.”
Of course, it’s regional in nature and not “all doom and gloom,” said deputy chief economist Derek Burleton, senior economist Michael Dolega and economists Diana Petramala and Warren Kirkland.
The populations of Alberta and Saskatchewan, two of the provinces hit by the oil shock, are younger and more mobile than those elsewhere, according to the report.
While workers fleeing those provinces won’t be as many as during the shock of the 1980s, the number of people leaving Alberta has picked up, they said.
So far, according to the TD economists, most of those leaving the hard-hit provinces have gone to British Columbia amid a rebound in B.C. manufacturing.
But because B.C. is still churning out new jobs, the province’s unemployment rate should still hold at about 6.2 to 6.4 per cent until next year.
“Eventually, we do think that more and more people will also start to head to Ontario and Quebec, as manufacturing begins ramping up in central Canada, which could put modest upward pressure on their unemployment rates,” the TD report said.
The TD economists forecast that Canada’s jobless rate will average 7.4 per cent this year, just a touch above where it stands now, dipping back to a still-elevated 7.3 per cent in 2017.
While Newfoundland and Labrador will still suffer Canada’s highest unemployment rate, in the area of 14 per cent in each of the next two years, Alberta’s jobless rate is forecast to surge to 8.2 per cent this year, compared with just 4.6 per cent in 2013, before the collapse in oil prices.
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Global markets are mixed so far.
Tokyo’s Nikkei gained 0.2 per cent, and Hong Kong’s Hang Seng 0.3 per cent, while the Shanghai composite tumbled 1.4 per cent.
In Europe, London’s FTSE 100, Germany’s DAX and the Paris CAC 40 were up by between 0.2 and 0.3 per cent by about 5:15 a.m. ET.
New York futures were down.
“Just when the downside seems to be regaining momentum, more buyers appear,” said IG senior market analyst Chris Beauchamp.
“That has been the pattern in European markets for a month or so now, and now it looks like the same is playing out in the U.S.”