Canada loses most jobs in 26 years
TheGlobeandMail.com – Business – Canada loses most jobs in 26 years
December 5, 2008. HEATHER SCOFFIELD
Canadians lost 71,000 jobs in November – almost triple expectations – and the unemployment rate crept up to 6.3 per cent, as Ontario employers felt the harsh impact of the U.S. recession.
That’s the biggest month of job losses since the recessionary period of 1982, and puts the unemployment rate at its highest point since November, 2006. In percentage terms, it’s the biggest month of job losses since February, 1991, also a time of recession. It comes after three months of solid job creation in Canada, but widespread job losses elsewhere in the world, especially the United States, mired in recession.
“Deteriorating global job markets have arrived on Canada’s doorstep,” said economists at Scotia Capital Inc. “The country is no longer bucking the general trend of lost jobs in most major economies.”
Economists had been expecting the job market to shed 25,000 jobs in November, and they quickly warned that Canada’s job market is poised to deteriorate further.
“Sadly, more jobs cuts are coming,” said Jennifer Lee, economist at BMO Nesbitt Burns, pointing to the announcement on Thursday that AbitibiBowater was closing a mill in Newfoundland, and reports on Friday morning that General Motors will be temporarily laying off 700 workers in Oshawa in February.
Ontario was the hardest hit area in November, with the manufacturing sector responsible for most of the cuts. Manufacturing and construction are poised for sharp job losses in the months to come, warned the Scotia economists.
“In our opinion, this is the start of a volatile trend that will see U.S. supply chain hits trickling across the border more aggressively in the coming months,” they said in a note to clients.
The November losses were divided between full-time and part-time jobs.
Ontario took the brunt of the job losses, with 66,000 fewer positions, mainly full-time. Manufacturing was particularly weak, with employers eliminating 42,000 factory jobs in Ontario, a worsening of a downward trend that has characterized the sector since 2002.
Ontario’s unemployment rate jumped to 7.1 per cent in November from 6.5 per cent the month before – putting the Ontario rate far above the national average.
Nova Scotia also saw jobs losses totalling 4,400, but other provinces were stable.
By sector, manufacturing was the hardest hit, seeing a national drop of 38,000 positions. Public administration shed 27,000 positions as hiring associated with the federal election in October was reversed.
With political stability in Ottawa over how to manage the economy threatening to cause another election at any time, “perhaps this is the solution for delivering stimulus!” joked Mark Chandler, fixed income strategist at RBC Dominion Securities.
Goods industries decreased employment by 33,000 jobs, while services cut 38,000 positions. That’s a change from earlier this year, when services employment was stable.
Over all, Canada saw 32,000 fewer full-time positions, and 38,000 fewer part-time positions in November, compared with a month earlier.
Still, wages were on the rise, with the year-over-year growth in the average hourly wage at 4.6 per cent – far higher than inflation, which was 2.6 per cent in October.
By gender, men were harder hit than women in November. Employment fell by 40,000 for men over the age of 25, while women saw little change. Employment for women has been double that of men since the start of the year.
So far this year, employment has increased 0.8 per cent or 133,000 jobs – a far slower pace than the 2.2 per cent growth or 361,000 positions seen during the first 11 months of 2007, Statscan noted.
While the unemployment rate of 6.3 per cent is low by historical standards, it is 0.5 percentage point above the 5.8 per cent seen at around the end of 2007 and the beginning of 2008.
The employment rate, which shows the portion of the working-age population that has a job, dropped to 63.3 per cent in November from 63.7 per cent in October.
The jobs numbers will probably strengthen the Bank of Canada’s resolve to cut interest rates by half a percentage point next week, economists said, especially since the unemployment figures have a strong influence on consumer confidence.