Canadian Employment (December 2013)

 

TD Economics

 

Data Release: The Canadian labour market ends 2013 on a very soft note

 

• The Canadian labour market lost 46K net new positions in December, well off from the small gain the market had been expecting.
• With more people looking for work, the unemployment rate increased to 7.2% – the metric had previously been under the 7.0%-mark for three months in a row.
• Job contraction in December was exclusively registered in full-time positions (-60K); part-time spots saw an increase in 14K.
• The private sector (-26K) and the self-employed (-38K) posted declines, but the public sector (+18K) avoided the same fate.
• Health care and social assistance was the only industry to create net new positions in December. Educational services (-19K) and other services (-15) were two notable entries in the loser’s column.   
• The story was mixed at the regional level. Four provinces managed to post net new job creation, with British Columbia scoring the best (+13K). By contrast, Ontario (-39K) and Alberta (+12K) saw jobs slip through their fingertips. To add salt to the wound, Ontario also saw its unemployment rate increase by 0.7 percentage points. It now sits at 7.9%.
• The average hourly wage rate decelerated to 0.5% in December, on a year-over-year basis, the slowest pace seen in five months.
• Annual figures confirm that 2013 was a lacklustre year for the record books:

­    a total of 102,000 net new positions were generated, or 8,500 per month;

­    98% of all the jobs created in 2013 were in the service-producing sectors;

­    the unemployment rate increased by 0.1 percentage points from January to December, although there has been much volatility in the months in between; and.

­    part-time employment grew by 2.5%, whereas full-time employment flat-lined.

 

Key Implications

 

• The Canadian labour market ended 2013 on a very soft note. Not only was the headline contraction in December sizeable, but the losses were broad-based across industries and exclusively seen in full-time positions. This was not the trifecta that economists were hoping for.
• If we take a step back and look at the year as whole, 2013 was certainly nothing to write home about. Employment growth for the year as a whole was a mere 0.6%, the slowest pace recorded in four years. The labour force participation rate also fell, as the labour force grew at a slower rate than the overall population.
• While the labour market ended 2013 with a loud thud, December’s poor showing was likely a one-off versus a new norm. The economic indicators to date suggest that the Canadian economy will grow by roughly 2-2.5% in 2013Q4. The underlying momentum will likely encourage employers to once again add to their payrolls, albeit at a modest rate of roughly 10-15,000 positions per month.

 

Sonya Gulati, Senior Economist

416-982-8063

 

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