Canada’s jobless rate ticks higher

flovestock

tavia grant
Globe and Mail Update
Published Friday, Dec. 02, 2011 7:07AM EST
Last updated Friday, Dec. 02, 2011 8:43AM EST

The Canadian economy unexpectedly shed 18,600 jobs last month, the third drop in four months, more evidence the labour market has slowed after a strong first half of the year.

The country’s jobless rate rose a notch to 7.4 per cent in November, a five-month high, Statistics Canada said Friday.

The jobs decline is the first back-to-back monthly drop since the recession and comes after employers cut 54,000 jobs in October, suggesting global economic woes and volatile markets are making employers cautious about hiring.

After smoothing out monthly swings, employment has posted an average decline of 2,000 jobs a month since mid year, “so there’s no question that employment growth has cooled sharply,” said Robert Kavcic, economist at BMO Nesbitt Burns, in a morning note.

Economists polled by Bloomberg had expected 20,000 new positions would be created, leaving the jobless rate at 7.3 per cent.

The overall picture is “one of a continued softening in Canada’s jobs market, suggesting a slowing in economic growth after a brisk third quarter,” said Avery Shenfeld, chief economist at CIBC World Markets.

Still, details of the report were encouraging, he noted. Full-time work rose, the private sector eked out a gain and most of the declines were in self-employment and part-time positions.

Part-time work tumbled by 53,000 while full-time jobs rose by 35,000. Overall employment levels are up by 212,000 from last year, led by growth in full-time positions.

Among provinces, Quebec saw -- by far -- the steepest job declines. Employment in the province tumbled by 31,000, pushing the unemployment rate up 0.3 percentage points to 8 per cent. Much of the drop was in wholesale and retail trade.

Employment also fell in Saskatchewan, while it rose in Nova Scotia. It was little changed elsewhere.

Youth saw a weaker jobs market last month. Employment among people aged 15 to 24 fell by 18,000 positions in November, and the jobless rate remained at 14.1 per cent.

Employment fell by 20,000 among core-aged men -- between 25 and 54 years old -- leaving employment for this group slightly above its year-ago level. Employment was little changed among core-aged women but is 1.3 per cent higher than last year.

Women aged 55 and older saw gains last month. Employment among older women has risen 2.1 per cent in the past year, and is up 2.9 per cent among older men.

Among sectors, losses on the services side of the economy outweighed gains on the goods-producing side. The retail, wholesale trade and building services sectors cut positions. Construction, natural resources and utilities added to payrolls.

The softening suggests consumers won’t be in much of a mood to spend. While wage growth rebounded in Novembers, “weakness in personal incomes combined with elevated household indebtedness will continue to keep consumers hesitant to spend this holiday season and into the New Year,” said Derek Burleton, deputy chief economist at Toronto-Dominion Bank.

He sees the labour market staying the doldrums for a while as government hiring slows and exporters remain hampered by global economic turmoil.

“Add it all up, and the hiring struggles are likely to extend well into 2012,” he said, adding that he sees the jobless rate continuing to rise to between 7.5 and 8 per cent in the next half year.