Canada’s Total Employment Growth +1.4% in July 2008
According to Statistics Canada’s July labour report, employment growth in Canada has now eased off from its peak rate in November of last year, at +2.7%, to about half that level, +1.4%. This is the lowest year-over-year rate of increase in jobs since September 2005. However, +1.4% job growth is still quite respectable and, when annualized, yields slightly more than 200,000 new jobs, which has been the economy’s average over the past twenty years.

Regionally, it is interesting to note where employment growth is clearly faster than the national pace. The West still has most of the jobs strength, with British Columbia (+2.9%), Manitoba (+2.5%) and Alberta (+2.2%) showing good gains. However, two provinces in the Atlantic Region are also currently recording job growth above the national rate – Nova Scotia (+2.7%) and Newfoundland and Labrador (+2.1%).

The biggest laggard in the country on the employment front is now Québec, with a year-over-year change of -0.1%. The unemployment rate nationwide remains quite low at 6.1%. In fact, the U.S. unemployment rate, at 5.7%, has almost caught up with Canada’s, an event which rarely occurs, partly because of some differences in statistics gathering techniques.

Canada Sheds 55,000 Mostly Part-time Jobs in July
There is one big concern on Canada’s jobs front, based on the latest month’s numbers from Statistics Canada. There was a downshift in employment of 55,000 jobs in July. This was by far the largest drop, month to month, in many years. While the decline in employment was almost entirely in lower-paying part-time jobs (as opposed to full-time), it does still set off alarm bells. Does this augur a turn in the employment tide? A look at some of the individual sectors offers clues.

Construction has been the star performer in terms of providing jobs over the last several years. That sector’s +8.3% job-growth pace is unsustainable, especially given the declines that are coming with respect to new home construction. CanaData is projecting starts to drop to 212,500 units this year and 190,000 units next year, from 228,000 last year. Manufacturing continues to suffer job losses and the services sector has tailed off considerably as a source of new jobs. At its peak, services were providing +3.6% job gains year over year. That figure has now dropped by half to +1.6%.

The U.S. economy has lost nearly half a million jobs in total since the beginning of this year. Furthermore, the weakening in U.S. economic activity is spreading around the world, with that nation’s northern neighbour in the direct line of fire. In Canada, the apparent shift in employment prospects which inevitably goes along with an economic slowdown will have an impact on confidence and consumer spending that will ripple out across all economic waters.

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