Global| Jul 08 2005Canadian Unemployment Rate Ties 29-Year Low in June, but Employment Growth Is Sluggish
Summary
Six months ago, we wrote about labor market conditions in Canada, describing them as a bit shaky after three years of growth. Such hesitancy is still evident in an uneven pattern of employment gains, slow in the first quarter and [...]
Six months ago, we wrote about labor market conditions in Canada, describing them as a bit shaky after three years of growth. Such hesitancy is still evident in an uneven pattern of employment gains, slow in the first quarter and picking up slightly in the second. Data for June were reported this morning by Statistics Canada. These latest employment increases are sufficient however, to cut the unemployment rate. It reached 6.7% in June, the lowest since June 2000, which in turn was the lowest since March 1976.
Among sectors of the economy, factory employment is continuing an uneven trend. June's modest increase follows a sizable monthly decline in May and the year-on-year performance, at -3.4%, is among the weakest since the recession in the early 1990s. Services are also remarkably sluggish, dragged down – interestingly – by health care and also accommodation and food services. The finance sector and business services, by contrast, are quite strong. Also strong is construction, with a remarkable 12-month increase of 7.6% through June. Persistently low interest rates in Canada, as in the United States, are facilitating considerable building.
The low unemployment rate would be cause for greater enthusiasm, but for slow growth in the labor force. As evident in the table below and in the second graph, the total number of people working or available for work has shown progressive deceleration. Two of the last three months have seen 12-month percentage changes below 1%, the first time since 1996 that even a single month has been that low.
| Canada Thousands |
June 2005 | May 2005 | June 2004 | 2004 | 2003 | 2002 |
|---|---|---|---|---|---|---|
| Employment | +14 | +35 | +1.3% | +1.8% | +2.3% | +2.4% |
| Manufacturing | +6 | -19 | -3.4% | +0.6% | -0.3% | +2.7% |
| Construction | +21 | -15 | +7.6% | +5.1% | +5.0% | +4.7% |
| Services Producing | -19 | +46 | +1.5% | +1.9% | +2.7% | +2.3% |
| Labor Force | -2 | +41 | +0.8% | +1.4% | +2.3% | +2.9% |
| Unemployment Rate | 6.7% | 6.8% | 7.2% | 7.2% | 7.6% | 7.7% |
Carol Stone, CBE
AuthorMore in Author Profile »Carol Stone, CBE came to Haver Analytics in 2003 following more than 35 years as a financial market economist at major Wall Street financial institutions, most especially Merrill Lynch and Nomura Securities. She has broad experience in analysis and forecasting of flow-of-funds accounts, the federal budget and Federal Reserve operations. At Nomura Securites, among other duties, she developed various indicator forecasting tools and edited a daily global publication produced in London and New York for readers in Tokyo. At Haver Analytics, Carol is a member of the Research Department, aiding database managers with research and documentation efforts, as well as posting commentary on select economic reports. In addition, she conducts Ways-of-the-World, a blog on economic issues for an Episcopal-Church-affiliated website, The Geranium Farm. During her career, Carol served as an officer of the Money Marketeers and the Downtown Economists Club. She has a PhD from NYU's Stern School of Business. She lives in Brooklyn, New York, and has a weekend home on Long Island.
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