Canadian Employment: A Second Consecutive Monthly Drop

Total employment decreased again in November (- 18.6K) following a marked deterioration of 54.0K jobs in October. Losses were observed in part-time jobs (-53.3K) while full-time jobs (+34.6K) posted an increase. The goodsproducing sector increased 25.2K, following a decrease of 51.9K the previous month. Within the goods-producing sector, construction (+19.6K) and natural resources (+9.9K) were the top performers. The services producing sector posted a significant drop of 43.9K with the losses coming mostly from trade (-34.1K) and business, building and other support services (-29.2K). At the provincial level, six provinces posted a decrease in employment with Québec (-30.5K) by far the worst performer. The unemployment rate increased to 7.4% from 7.3% a month before.

OPINION: In recent months, the situation of the labor market in Canada has darkened. Jobs were down 3 times over the last four months with manufacturing jobs experiencing a third consecutive monthly drop in November. This month report is definitely a lacklustre performance as it comes on the back of a 54K loss in October. That said, do not forget the inherent volatility of the Canadian jobs numbers: back in September jobs had surged 61K. The employment trend is flat in the past three months. Moreover, note that this month poor performance is explained by one sector in one province namely Quebec’s trade, a highly volatile component. In fact, despite this outsized loss in employment, this sector‘s employment in that province is back where it stood at the beginning of the year (middle chart). With respect to full-time jobs in Canada, however, the news was much better with a 34K gain in November for a cumulative gain of 26K in the past three months. The pick up in full-time employment more than offset the negative impact of the part-time jobs losses contributing to the advance in total hours worked on the month (+0.3%). So far in Q4, the wage bill (total hours worked times average hourly earnings) is up 2.6% at an annual rate meaning that consumption continues to get support from the labour market in Canada. However, total hours worked remained negative so far in the quarter (-0.8%), this is
consistent with a moderation in GDP in Q4 following a hot 3.5% performance in Q3.